Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Republic of Ireland

Mr. Chichester-Clark: asked the Secretary of State for Trade and Industry what was the volume and value of milk products imported into the United Kingdom from the Republic of Ireland in the years 1968, 1969 and 1970 to the latest convenient date.

The Minister for Trade (Mr. Michael Noble): 63,000 tons; 61,000 tons; and, in January to September 1970, 58,000 tons. The corresponding values were £17 million. £16 million and £15 million.

Mr. Chichester-Clark: Is there not now a strong case for an immediate levy on milk products coming from all countries, to give a stimulus to farmers in this country and, in particular, to the hard-pressed farmers of Northern Ireland, for example, in the production of butter?

Mr. Noble: My hon. Friend should address the question of levies to my right right hon. Friend the Minister of Agriculture, Fisheries and Food. I agree with him that a stimulus is needed.

Electrical Tools

Mr. Molloy: asked the Secretary of State for Trade and Industry if he will take steps to protect the interests of British firms producing electrical tools.

The Minister for Industry (Sir John Eden): No special steps have been requested by the firms concerned.

Mr. Molloy: Is the hon. Gentleman aware that the speech of his right hon.

Friend the Secretary of State for the Environment caused irritation and annoyance, for which his apology has made some amends? Is the Minister prepared to advise his other Ministerial colleagues to be careful of their language in future?

Sir J. Eden: My right hon. Friend has already written to the chairman of the company concerned. I have no reason to believe that the company will not be able to meet any competition.

Air Corporations (Transfer of Routes)

Mr. Molloy: asked the Secretary of State for Trade and Industry if he will now make a further statement concerning the transfer of certain British European Airways and British Overseas Airways Corporation routes.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): I have nothing to add to what my right hon. Friend the Minister for Trade said during the Second Reading debate on the Civil Aviation (Declaratory Provisions) Bill.

Mr. Molloy: That is not much of an answer. Is the right hon. Gentleman aware that the Civil Aviation (Declaratory Provisions) is regarded as being designed to circumvent the Acts of 1960 and 1967 and is looked upon as an execrable and treacherous measure by all those who work in B.O.A.C. and B.E.A.? Is he further aware that if the measure is carried out it will not only damage the morale of the British air corporations but will give succour to their foreign competitors? Will the Government drop this incredible and remarkable anti-British attitude which they so often exhibit?

Mr. Davies: I do not agree with any of the points made by the hon. Gentleman. The Bill in question is designed not to circumvent the previous provisions but to reinforce the Government's position.

Mr. Onslow: Does my right hon. Friend agree that if B.O.A.C. could shake itself free of industrial troubles it would more than make up the loss of revenue which might result from the Bill? Would not the hon. Member for Ealing, North (Mr. Molloy) be better employed


in promoting industrial harmony in place of strife?

Mr. Davies: It is correct to say that the proposed transfer is of a very small proportion of the routes of B.O.A.C. I quite agree with the comments in the latter part of the supplementary question.

Mr. Mason: Do I understand that the Government are still extracting information on routes and route profitability from B.O.A.C. and B.E.A. and handing it over to Caledonian so that Caledonian can pick and choose the routes it would like? Do I gather that after this disgraceful operation is complete, the right hon. Gentleman will leave it to the Air Transport Licensing Board to transfer the routes? Is not that putting the licensing procedure on the level of a farce?

Mr. Davies: Discussions are proceeding with both B.O.A.C. and Caledonian, but not quite in the framework mentioned by the right hon. Gentleman. When a decision is reached Caledonian will need to apply to the A.T.L.B. for the routes in question.

Fuel Supplies

Mr. Lane: asked the Secretary of State for Trade and Industry whether he will make a further statement on fuel supply prospects this winter.

Sir G. Nabarro: asked the Secretary of State for Trade and Industry, having regard to the fall in coal output caused by widespread mining strikes, whether he will now make a further statement on electricity supplies for industry, commerce and homes in the forthcoming winter.

Mr. Cronin: asked the Secretary of State for Trade and Industry if he will make a statement on the present situation with regard to the adequacy of coal stocks for this winter.

Mr. Eadie: asked the Secretary of State for Trade and Industry if he will make a further statement on the position of coal supplies as a result of industrial action by coal-miners.

Mr. Skinner: asked the Secretary of State for Trade and Industry what further plans he has to prevent a shortage of winter fuel.

Sir J. Eden: The margins for solid fuel, which were already extremely narrow, have been further reduced by the recent unofficial strikes. Direct losses are about 2½ million tons, but the total will be higher. Severe weather or further interruption in supply could, therefore, lead to real difficulties. Supplies of fuel oil, though tight, should be adequate.

Mr. Lane: I am grateful for that answer. Is it not a fact that, alone among the primary fuel supplying industries, the private enterprise oil companies are achieving a substantial increase in the level of supplies this winter compared with the level forecast in 1967, despite unforeseeable difficulties in several parts of the world?

Sir J. Eden: Yes, the oil companies are certainly bringing the oil which is needed to this country. As my hon. Friend knows, they are experiencing some difficulty because of the rising cost of freight.

Sir G. Nabarro: Can my right hon. Friend say what is the likely effect of the coal shortage on electricity generation during the winter months and to what extent load shedding, which has in the past caused so much hardship, will be indulged in? Having regard to the number of dual-fired power stations in Britain, will those dual-tired stations swing straight over to oil instead of coal should there be any shortage of electricity supplies?

Sir J. Eden: The C.E.G.B. coal stocks are below the corresponding figure for this time last year. In its view, even after taking into account further supplies during the rest of this winter, there is no margin to meet any contingency. Therefore, the position is worrying.

Mr. Eadie: Would the Minister not agree that the way to safeguard coal supplies would be to try to inject some confidence into the industry—something that the Minister has signally failed to do to date? Is he not aware that it does not inspire confidence in the industry when the Tory Government give hints that they are prepared to dismantle the coal industry, and that the miners will reject that policy?

Sir J. Eden: The Coal Industry Bill will be debated later this week.

Mr. Skinner: In view of the problems of fuel shortages this winter, can the


Minister confirm or deny whether Lord Robens has been reappointed for a further five years? Secondly, if Lord Robens has been reappointed, could the Minister say whether Lord Robens will accept the doctrine embodied in the Tories' new Coal Industry Bill?

Sir J. Eden: An announcement in answer to this question will be given at the appropriate time.

Mr. Benn: The Minister made no reference to the technical difficulties with the big 500 mW sets or to the corrosion at the magnox power stations. Could he say what effect this is likely to have on C.E.G.B. performance?

Sir J. Eden: Yes, Sir. Briefly, the technical problems encountered are being overcome. The difficulties experienced by the magnox power stations have been the subject of a report. I hope to be able to answer this matter is slightly more detail during the Second Reading debate on Thursday.

Sir G. Nabarro: On a point of order, Mr. Speaker. In view of those replies, I wish to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.

Sir G. Nabarro: asked the Secretary of State for Trade and Industry, having regard to fall in coal output caused by widespread mining strikes, whether he will now make a further statement on winter fuel prospects for industry, commerce and homes.

Sir J. Eden: The steel industry is apprehensive about supplies, particularly long term, of coking coal. The margins of foundry coke are very narrow. The difficulties already being experienced with solid smokeless fuels have been made worse. Gas supplies are secure.

Sir G. Nabarro: Whereas we can import coal—and, marginally, are doing so—does not my hon. Friend agree that we can import hardly any electricity? In those circumstances, will he consider giving a direction to the Central Electricity Generating Board that it should have abundant supplies of fuel oil available in order to work every oil-fired station, every dual-fired station on oil and every nuclear station to maximum capacity to

avoid the use of coal and to supply enough electricity for the winter months?

Sir J. Eden: That is primarily a matter for the Central Electricity Generating Board. Many applications for conversion have already been submitted to me. I am considering them at present.

Mr. Ogden: Does not the hon. Member agree that so long as we have the continuing presence of the hon. Member for Worcestershire, South (Sir G. Nabarro) we have no need to import natural gas? In view of the reference in the Question to widespread strikes, will the Minister take the opportunity to pay tribute—overdue tribute—to the organisation and constitution of the National Union of Mineworkers, and its leadership for the bloody hard work that every member of that union undertakes, day after day and year after year?

Sir J. Eden: I readily pay tribute to the hard work of those who are working in the mines, but the other questions are properly directed to my right hon. Friend the Secretary of State for Employment.

Competition

Mr. Lane: asked the Secretary of State for Trade and Industry what proposals he now has for strengthening the forces of competition and for improving the surveillance of monopolies and mergers.

Mr. John Davies: I hope to make a statement shortly.

Mr. Lane: Could my right hon. Friend confirm that his proposals will provide for a speeding up of the work of the investigatory bodies in future?

Mr. Davies: Certainly we are currently investigating how we can speed up the inquiries and the whole impact of the situation into the formulation of better competition.

Mr. Dell: Could the Secretary of State give an assurance that this statement will be made before Christmas? Since this is supposed to be an important part of Government policy, it seems strange that we have to wait so long for it.

Mr. Davies: I shall make every endeavour to make that statement before Christmas.

Millom (Industrial Development)

Dr. John A. Cunningham: asked the Secretary of State for Trade and Industry what measures he has taken to secure new industrial development in Millom; and if he will make a statement.

Sir J. Eden: The prospects for developments at Millom have been brought to the attention of a number of industrialists inquiring about new locations. Three firms have the area under active consideration at the present time. Every effort will continue to be made to attract suitable industry to the area.

Dr. Cunningham: Is not the Minister aware that that is a thoroughly unsatisfactory answer, particularly in view of the mileage already made by the Conservative Party out of the closure of Millom Hematite? Is he not also aware that almost 2,000 men regularly travel from Millom to places like Barrow, Whitehaven and Ulverston, involving them in round trips every day of 50 to 60 miles, and that these costs are having a very deleterious effect on family incomes in the town?

Sir J. Eden: I am sorry that the hon. Gentleman was disappointed with the reply. I thought that it indicated what is the case, that we regard the situation as serious and are doing our best to help. As the hon. Gentleman knows, the closing of the Millom Hematite Iron and Ore Company took place in 1968 when the Labour Government were in power.

West and South Cumberland (Industry)

Dr. John A. Cunningham: asked the Secretary of State for Trade and Industry what was the total amount of Government aid to industry in West and South Cumberland from October 1964 to October 1970.

Sir J. Eden: This information is not collected on a county basis, nor for the period mentioned. For the Northern development area as a whole, Government preferential assistance to industry in the six years ending 31st March 1970 amounted to some £269 million.

Dr. Cunningham: That answer is again unsatisfactory. Surely the Minister should be aware that Questions of this nature can be answered. Secondly, will

he give any guarantee that the level of aid to industry in these areas in the next few years will not be less than it has been hitherto?

Sir J, Eden: We will do our best to help this area as it has been helped in the past. As the hon. Gentleman can see from my answer, a great deal of public money has been invested. The new form of incentives produced by the Government will direct money to the creation of new jobs.

Decca (Navigational Aids)

Mr. Onslow: asked the Secretary of State for Trade and Industry what action he has taken to assess the implications of the decision by the Decca Company to reduce its activity in the area of navigational aids for ships and aircraft; and if he will make a statement.

Mr. Noble: I am not aware of any intention of the company to reduce its activity in the field of marine navigational aids. On the aviation side, some of the company's pioneering work has failed to obtain international recognition, and in these circumstances I regard the company's decision to concentrate effort and investment on those airborne aids which are already finding markets abroad as one to be welcomed.

Mr. Onslow: Will my right hon. Friend investigate the possibility that if the airborne aids have not so far acquired international recognition, this may in part be due to the lack of support given to them in this country?

Mr. Noble: I do not think my hon. Friend is being entirely fair, because in almost every case we have helped either through B.E.A. or through B.O.A.C., or by any other method, to try to get greater international recognition for the work Decca has been doing.

Mr. Benn: Is this airborne equipment eligible for launching aid?

Mr. Noble: No, Sir.

Electrical Contracting Industry (Tendering)

Mr. Hugh Jenkins: asked the Secretary of State for Trade and Industry whether he will introduce legislation to stop collusive tendering in the electrical


contracting industry and the agreements made between major companies to delude public authorities and the practice by which firms agree to submit unsuccessful tenders under a financial arrangement with the successful tenderer.

Mr. John Davies: As I told the hon. and learned Member for Warrington (Mr. W. T. Williams) on 9th November, these practices are already covered by existing legislation.—[Vol. 806, c. 2.]

Mr. Hugh Jenkins: Could the right hon. Gentleman say how much money is involved in the 32 cases that were recently before the Restrictive Practices Court, whether it is thousands, hundreds of thousands or millions of £s, what arrangements are being made to refund this money to the public authorities which have been grossly overcharged, and whether any criminal proceedings are contemplated?

Mr. Davies: The public authorities concerned are themselves able to undertake the necessary processes to recover losses they have sustained. This matter does not fall directly under the control of my Department, because the Restrictive Practices Court is a statutory organisation on its own. It has its own responsibilities. Therefore the matter is within its hands, not within mine.

Later—

Mr. Hugh Jenkins: On a point of order, Mr. Speaker. Mindful of your guidance that points of order should be raised at the end of Question Time and not during it, may I give notice that as the answer to Question No. 9 was not satisfactory I will seek to raise this matter on the Adjournment.

Mr. Speaker: Order. I told the hon. Gentleman last week that giving notice in such a way is a work of supererogation.

Northern Region (Industrial Development Certificates)

Mr. Boyden: asked the Secretary of State for Trade and Industry (1) how many new jobs are expected to arise in the Northern Region from the industrial development certificates issued during the three months ending 31st October 1970;
(2) how many new jobs are expected to arise in the Bishop Auckland constituency from the industrial development certificates issued during the three months ended 31st October, 1970.

Sir J. Eden: In the period 1st August to 31st October, 1970, industrial development certificates for 1 million square feet were issued in the Northern Region. The schemes concerned are estimated by the applicants to provide 1,580 additional jobs, 1,200 of them for males. No certificates were issued during the same period in the employment exchange areas of Bishop Auckland, Barnard Castle and Shildon, which most nearly correspond to the Bishop Auckland constituency.

Mr. Boyden: In view of the disappointing figures for South-West Durham, would the Minister give consideration to asking the Regional Controller to make a special effort to visit the local authorities to see what could be done by way of more co-operation between local authorities, the county council and his Department?

Sir J. Eden: Yes, Sir. I will certainly do that. The situation is being very closely watched at the moment. The jobs expected to arise during the next few years in authorised new buildings in the Northern Region as a whole total about 39,000, of which over 4,000 are in the Bishop Auckland travel-to-work area.

Mr. Fernyhough: When the Minister says that the development certificates which have been given represented just over 1,000 new jobs between the beginning of August and the end of October in the Northern Region, is he aware that as a consequence of the Minister's attitude we lost as many jobs at Palmers Hebburn, that Glacier Metals and British Oxygen have closed, and that if closures go on at this pace it will be necessary for the Government to redouble their efforts to maintain the present employment level, let alone reduce unemployment?

Sir J. Eden: The Question was about industrial certificates and the investment measures designed to meet problems created by closure and unemployment.

Mr. Varley: Will the Minister accept that if the development areas are to get the projects they deserve, it will only be


through the strict observance of an i.d.c. policy? Could he give an absolute assurance that his Department will ensure that the i.d.c. policy is observed as strictly as was done by the Labour Government.

Sir J. Eden: The i.d.c. policy is under review with the rest of our regional policies.

Third London Airport

Mr. Benyon: asked the Secretary of State for Trade and Industry when he now expects to receive the report of the Roskill Commission on the Third London Airport.

Mr. John Davies: I am informed that the Commission hopes to submit its report to the Government by the turn of the year.

Mr. Benyon: Will the Minister state what procedure will be followed thereafter? In view of the importance of this planning decision to the South-East, will the Government allow time for the matter to be debated both in the country and in the House before making up their mind on the Roskill recommendations?

Mr. Davies: When the report is received it will be considered very carefully indeed. We are conscious of the urgency which surrounds this whole problem and also of the desire and the need for it to be fully debated in the House.

Mr. Spearing: Does the right hon. Gentleman agree that there should be adequate time after publication of the report for public interest to debate the matter before it is debated in the House?

Mr. Davies: I understand that there is tremendous public interest in this subject. But the hon. Gentleman should bear in mind that delays can also be of the utmost disturbance to people at large. Therefore, the Government feel that they must act with due promptitude.

Mr. Allason: Would it not be most helpful if my right hon. Friend indicated at the same time as he publishes the report that he would be prepared to put the third London Airport at Foulness and so alleviate any anxiety which will lie with inland sites?

Mr. Davies: I think that we must wait for the report to come out first. Clearly,

the Government will be very much moved in their decision by the recommendations in the report.

European Free Trade Association

Mrs. Renée Short: asked the Secretary of State for Trade and Industry whether he will publish more up-to-date pamphlets about the record of the European Free Trade Association.

Mr. Noble: These are the responsibility of the E.F.T.A. Secretariat in Geneva. Up-to-date records are published in the Secretariat's Bulletin and in E.F.T.A. annual reports. In the United Kingdom these and other publications are available free on request from the Department's E.F.T.A. Information Centre.

Mrs. Short: I thank the right hon. Gentleman for that reply. I see these bulletins and publications regularly. But as there appears to be a conspiracy of silence by successive Governments about the achievements of E.F.T.A. and the increase in E.F.T.A. trade, may I ask whether the Minister thinks that at this time, when the Common Market negotiations are becoming more crucial, it would be a matter of fair balance if his Department were to take some initiative?

Mr. Noble: I am delighted to hear that the hon. Lady reads the E.F.T.A. bulletins with such care. There has indeed been a remarkable increase in trade with E.F.T.A. I cannot speak for the former Government, but we have certainly used this success on a number of occasions in speeches and in other ways. It is almost exactly comparable with the increase in trade with the E.E.C. in percentage terms.

Mrs. Renée Short: asked the Secretary of State for Trade and Industry whether he will make a statement on the recent European Free Trade Association conference at Geneva, which he attended.

Mr. Fell: asked the Secretary of State for Trade and Industry whether he will make a statement on his visit to the European Free Trade Association Conference at Geneva.

Mr. Noble: I would refer the hon. Members to the reply that my right hon. Friend the Secretary of State for Trade and Industry gave to my hon. Friend


the Member for St. Marylebone (Mr. Kenneth Baker) on 10th November.—[Vol. 806, c. 116–17.]

Mrs. Short: As the communiqué issued after the meeting clearly indicates that the E.F.T.A. countries are anxious to continue the liberalisation of world trade and to support G.A.T.T. as a means of doing this, is it not clear that the aims and objects of the Government in getting into the Common Market on any terms at all conflict with the liberalisation of world trade? Does the Minister think, therefore, that either our representatives at E.F.T.A. meetings should be changed or, better still, we should stop this attempt to get into the Common Market?

Mr. Noble: Having attended the E.F.T.A. Conference for the first time, I can assure the hon. Lady that this was not the view expressed by any E.F.T.A. country during the course of the two days.

Mrs. Short: What was not?

Mr. Noble: There was a great deal—

Mrs. Short: What was not?

Mr. Speaker: Order.

Mr. Noble: The view expressed by the hon. Lady, that we should give up any attempt to get into the Common Market to do better with the E.F.T.A. countries. All the countries concerned were very much interested in the way that our negotiations were proceeding, and most were looking forward to having their own negotiations in the following few weeks. I think that every country there felt that there was an enormous potential for increased European trade as a whole.

Mr. Jay: In view of the increase in E.F.T.A. trade, to which the Minister referred, and the great value of E.F.T.A. to this country, will the right hon. Gentleman at least give an assurance that the Government will not reach any settlement with the E.E.C. which would involve the re-erection of tariff barriers between this country and other members of E.F.T.A.?

Mr. Noble: The right hon. Gentleman knows about E.F.T.A. and other matters sufficiently well to realise that that is an

assurance which I could not conceivably give at this stage.

Mrs. Short: Why not? Are they to be sold down the river, too?

Mr. Noble: It is certainly true, as I said to the hon. Member for Wolverhampton, North-East (Mrs. Renée Short), that all the countries concerned realise the enormous advantage which would come to European trade as a whole if suitable negotiations could be made all round.

Mr. Marten: Is not the answer to this problem, which the House goes on and on discussing, a free trade area between the Six and the Seven?

Mr. Noble: This may well be my hon. Friend's answer, but it is not being discussed anywhere at the moment.

An Hon. Member: Why not?

Mr. Mason: Will the right hon. Gentleman tell the House how he is keeping the E.F.T.A. countries informed of progress in our negotiations with the E.E.C.?

Mr. Noble: If the right hon. Gentleman had studied the answer given a short time ago by my right hon. Friend the Secretary of State, he would have seen that we gave full details to all the E.F.T.A. countries at the E.F.T.A. Council meeting on how the negotiations were going on, and these continue regularly, apart from Ministerial meetings.

Mr. Biggs-Davison: asked the Secretary of State for Trade and Industry whether he will state the subjects of common interest that have been discussed in the last 12 months by member countries of the European Free Trade Association.

Mr. Noble: In addition to the twice-yearly Ministerial meeting, the E.F.T.A. Council meets weekly to discuss the wide range of subjects of common interest to members. The more important in the past year have included wider economic integration in Europe, international trade policy, Icelandic accession to E.F.T.A. and new measures to improve further the smooth working of the free trade area.

Mr. Biggs-Davison: Have not patents, company law and taxation also been discussed? Does not my right hon. Friend's reply show that E.F.T.A. is more than a mere organisation for removing tariffs between members? Have not Her Majesty's Government given an assurance that all the trading and other benefits which have been achieved within E.F.T.A. will, so far as possible, be retained when an agreement is reached with the Community?

Mr. Noble: "If an agreement is reached with the Community", is, I am sure, what my hon. Friend wanted to say, Many of the points which he has mentioned have been discussed in E.F.T.A., such as company law. In trying to keep the answer short, I could not go into complete detail; but I assure my hon. Friend that it is the desire of everybody in E.F.T.A. to maintain the impetus which we have achieved over the last 10 years in the best possible way in the coming years.

Mr. Milne: Is the right hon. Gentleman aware that E.F.T.A. still represents our major foothold in Europe? As Sweden has not made application for membership and Norway's application is unlikely to be supported in that country, may I ask the right hon. Gentleman to ensure that our E.F.T.A. links are maintained both before we go into the Common Market and after, if we do?

Mr. Noble: Our trade with the E.E.C. countries is 50 per cent. greater than with the E.F.T.A. countries, though both are extremely satisfactory from our point of view. I cannot do more than repeat what I have already said; that it is the aim of the E.F.T.A. Council, in the course of the negotiations in which so many of the member countries are involved in one form or another, to increase the total of European trade in the most satisfactory manner.

Mr. Moyle: asked the Secretary of State for Trade and Industry whether he will make a statement upon the result of Iceland joining the European Free Trade Association.

Mr. Noble: Since Iceland only joined E.F.T.A. on 1st March, 1970, it is much too soon to expect any reliable indication

of the results of her accession. But Iceland's trade with her E.F.T.A. partners in the first nine months of this year has shown a substantial and welcome increase in both directions.

Mr. Moyle: Does not the right hon. Gentleman agree that one feature of Iceland's joining the E.F.T.A. has been the long transitional period given to her? Does he not also agree that this is welcome? Will he see that it becomes a principle of wide application in international trade negotiations?

Mr. Noble: The point is taken but I think the hon. Gentleman will accept that Iceland is not perhaps normal as an industrial country.

Mr. Wall: Has Iceland's joining E.F.T.A. had any adverse effect on the British fishing industry?

Mr. Noble: I think it is true to say that there has been no adverse effect and that the total amount of fillets from Iceland comes within the Scandinavian total.

Mr. Moyle: asked the Secretary of State for Trade and Industry by what percentage has trade increased between the member countries of the European Free Trade Association since it was established.

Mr. Noble: In terms of U.S. dollars, intra-trade of the European Free Trade Association, as measured by exports, increased by 143 per cent. between 1960 and 1969.

Mr. Moyle: Does not the right hon. Gentleman agree that this compares favourably with intra-Common Market trade? Why have the Government not already proposed at Brussels that even in the event of a successful outcome of the negotiations no tariff barriers will be allowed to exist between the Common Market and the E.F.T.A. countries, whether they are in or out of the Common Market?

Mr. Noble: The hon. Gentleman is quite correct that it compares favourably; indeed, there has been almost exactly the same percentage increase as with the E.E.C. I have no doubt that if there had been no tariff barriers our trade with the E.E.C. countries would have been greatly increased. But the second part of his


supplementary question is quite separate and not one for answer today.

Mr. Lane: Arising from all these questions, can my right hon. Friend remind hon. Members opposite by how much more our own national wealth would have increased if we had been members of the Common Market during the last 10 years compared with the present situation?

Mr. Noble: That is a hypothetical question but our trade with both E.F.T.A. and the E.E.C. has increased in almost exactly the same proportion over the last 10 years, and there is at least a reasonable basis for the assumption that if there had been no trade barriers with the Community our trade with it would have been very much greater.

Mr. Sheldon: Is not the reality of this whole business the fact that E.F.T.A. is a free trade area which ignores agriculture, and also, incidentally, certain manufactured goods? Is it not a fact that this strong limitation prevents it going any further—a fact recognised by the E.F.T.A. Council itself—and that it is useless to think of E.F.T.A. as anything like an alternative? Has it not reached the end of the road—a pity, but there it is? Is this fact not recognised by the E.F.T.A. Council itself in the applications that members have put in?

Mr. Speaker: Order. A lengthy supplementary question means that another supplementary question may have to be cut out.

Mr. Noble: In reply to the hon. Gentleman, the two things are not comparable and it is dangerous to draw analogies from one to another.

Mr. English: asked the Secretary of State for Trade and Industry whether he will make a statement on the development of trade that has taken place between the European Free Trade Association and the European Economic Community.

Mr. John Davies: Trade between the two groups doubled in terms of U.S. dollars between 1960 and 1969 and has continued to rise strongly this year. This trade has, however, increased less than trade within each group.

Mr. English: Will the right hon. Gentleman give his reasons for believing that a junction between some of the E.F.T.A. group, the destruction of E.F.T.A. and the addition of some of the E.F.T.A. countries to the E.E.C. will increase British trade with the tariff barriers involved?

Mr. Davies: As my right hon. Friend said just now, the position and the advantages which the E.F.T.A. Agreement contains are sought to be preserved within the framework of the current negotiations with the Community. It is a fact that the Community's tendency to maintain the impetus of intra-trading is perhaps greater than that of E.F.T.A.

Mr. Marten: Is not this country really after maximising its world trade, and is not its E.E.C. trade only 20 per cent. of its whole trade? Should we not look at the whole thing the Community, E.F.T.A. and the world—in one way?

Mr. Davies: Our whole purpose is to increase our total world trade. A considerable step towards that increase would be attained by negotiating suitable terms with the Community—and I emphasise the words "suitable terms". They have a very great bearing on this.

Mr. Body: asked the Secretary of State for Trade and Industry what progress has been made within the European Free Trade Association drafting schemes of reciprocal recognition in the testing of equipment, plant and machinery.

Mr. Noble: The E.F.T.A. Council is giving final consideration to a scheme covering pressure vessels. Expert groups are making good progress in drafting schemes for gas appliances, marine safety equipment and agricultural machinery.

Mr. Body: Does not this progress clearly indicate that, having eliminated tariffs, E.F.T.A. is now capable of eliminating the non-tariff barriers to trade? Is not this the answer to the hon. Member for Ashton-under-Lyne (Mr. Sheldon)?

Mr. Noble: This is a very satisfactory development but I agree that non-tariff barriers are the main purpose at the moment of the E.F.T.A. Council deliberations.

Mr. English: asked the Secretary of State for Trade and Industry whether he will give more publicity to the removal of non-tariff barriers to trade now being made by the European Free Trade Association.

Mr. Alfred Morris: asked the Secretary of State for Trade and Industry what steps are being taken by the member countries of the European Free Trade Association to remove non-tariff barriers to trade.

Mr. Noble: Recognising the seriousness of non-tariff barriers to trade, E.F.T.A. is keeping under review its rules of competition and working to reduce technical barriers. Agreements have recently been reached on pharmaceuticals and pressure vessels, and others are in preparation. Every effort is made by the Department and by the E.F.T.A. Secretariat to publicise progress in these fields.

Mr. English: Is it not the case that the progress made in this direction by E.F.T.A. is greater than that being made throughout the rest of the world with regard to such barriers?

Mr. Noble: I cannot say with certainty about that, but in E.F.T.A., where a very close relationship has been built up over the last 10 years with our partners, we are getting on very well.

Mr. Biffen: Would not my right hon. Friend agree that no reasonable person can any longer maintain that Greenwich Mean Time is a non-tariff barrier to trade?

Mr. Noble: Yes, Sir.

Mr. Eadie: We have had some contradictory answers from the Government today. The right hon. Gentleman has told us that E.F.T.A. is a fine organisation, but he will not promise that there will be no dismantling of it, and that the E.E.C. has 50 per cent. more trade. Is it not ludicrous that we should be told this sort of thing today? Does he not agree that since the majority of our people are against the Common Market, a statement should be made by the Government reflecting the opinion of the British people?

Mr. Noble: I cannot agree with the last point made by the hon. Gentleman

but I can agree that E.F.T.A. has been extremely successful. But saying that does not, to my mind, conflict with saying that we should move from a successful E.F.T.A., if we can, to a very much more successful trading partnership with the whole of Europe.

Mr. Pavitt: asked the Secretary of State for Trade and Industry on how many occasions in the last 12 months has any member of the European Free Trade Association invoked the escape or safeguard clauses.

Mr. Noble: None, Sir.

Mr. Pavitt: Is not there a remarkable contrast between the outward-looking approach of E.F.T.A. and the inward-looking approach of E.E.C.? In the light of that fact, will not the Government review their whole approach to the question of applying to join the E.E.C., especially in the light of the pressure of G.A.T.T. and other pressures on tariffs?

Mr. Noble: No, Sir. The question cannot be considered on such a narrow basis. As I have said, E.F.T.A. has been extremely successful, and from it we hope to build even greater success on a wider basis.

Mr. Pavitt: asked the Secretary of State for Trade and Industry what steps he is taking to promote the distribution of the European Free Trade Association Bulletin.

Mr. Noble: The Bulletin's distribution is promoted by the Department's E.F.T.A. Information Centre. Present circulation of each issue in the United Kingdom is over 14,000 copies, compared with about 9,000 four years ago.

Mr. Pavitt: Is the Minister aware that the wastepaper baskets of hon. Members are full of millions of pounds' worth of E.E.C. propaganda, whereas only 14,000 of these E.F.T.A. pamphlets are reaching hon. Members? Will not he do his duty by the House and ensure that we have as much information about E.F.T.A. as the tripe that we are getting about the E.E.C.?

Mr. Noble: I hope that the hon. Member will get in touch with his hon. Friend who asked a Question earlier, who found the E.E.C. material extremely valuable.


I confirm that many of these documents are going not just to Members of Parliament but to industry, and all over the country. There has been a considerable increase in the demand for them. I am certain that they are useful, and that most are read.

Mr. Arthur Lewis: asked the Secretary of State for Trade and Industry what representations were made to him about the United Kingdom's import deposit scheme at the last European Free Trade Association meeting of Ministers.

Mr. Noble: None, Sir.

Mr. Lewis: Does that reply mean that there have been no comments, adverse or otherwise—no remarks at all? Does it mean that the E.F.T.A. countries agree that the import deposit scheme should remain in force, or do they think that it should be terminated?

Mr. Noble: The Question concerned the last meeting of the European Free Trade Association—the one that I was at. My answer reflects exactly, shortly and accurately what was said then.

Gloucester (Industrial Development Certificates)

Mrs. Sally Oppenheim: asked the Secretary of State for Trade and Industry how many of the industrial development certificates issued to firms between 1st January, 1968, and 30th June, 1970, wishing to expand or commence business in Gloucester relate to warehousing extentions, and how many relate to manufacturing extensions.

Sir J. Eden: Industrial development certificates for 554,000 square feet were issued in the Gloucester employment exchange area from 1st January, 1968, to 30th June, 1970; of this, 148,000 square feet was for storage and other non-production space. But many warehouses do not require industrial development certificates.

Mrs. Sally Oppenheim: In determining the number of industrial development certificates that my hon. Friend is likely to issue for Gloucester in future, will he bear in mind that a fairly high proportion of those issued over the last two years were for warehousing extensions, which are not very job productive? Will he please be as generous as possible in

future in the issue of these certificates for Gloucester, taking into consideration the comparatively high rate of unemployment there?

Sir J. Eden: I will bear in mind the points my hon. Friend has made.

Electricity and Gas Boards (Retailing and Contracting)

Sir J. Langford-Holt: asked the Secretary of State for Trade and Industry if he will make a statement on his policy towards the contracting activities of electricity boards, in view of the unfair competition which this trading represents with ordinary electrical contractors; and what action he proposes to take.

Mr. David Stoddart: asked the Secretary of State for Trade and Industry if he will now give an assurance that he has no plans to dispose of the retailing and contracting activities of electricity and gas boards.

Sir J. Eden: I am considering the present range of the boards' activities, including the treatment of retailing and contracting in their accounts.

Sir J. Langford-Holt: Will my hon. Friend bear in mind that, as well as being suppliers of electricity, the electricity boards are able to pass on to their contracting departments many advantages that are not available to small contracting firms trying to compete with them?

Sir J. Eden: That is one of the aspects that I am examining at present.

Mr. Stoddart: Is the hon. Gentleman aware that that reply and the reply given by him recently to his hon. Friend the Member for Cambridge (Mr. Lane) are causing a great deal of disquiet in the electricity supply and gas industry? Is he also aware that the retailing and contracting activities of these organisations contribute a great deal towards alleviating overhead expenses and also towards keeping the cost of these fuels at a reasonably low level? Will he make up his mind pretty soon?

Sir J. Eden: I am aware of the points that the hon. Member has made about the wish of the industry to know the position as soon as possible, but I want to be certain that I arrive at the right decision and do not take a rushed one.

Mr. Emery: Does my hon. Friend realise that certain of the contracting activities carried on by electricity boards are settled by the C.E.G.B. at the time of letting and purchase of contracts? Does he not, therefore, think that it is unfortunate that the C.E.G.B. should have decided to break up its central purchasing department and spread it in eight sections?

Sir J. Eden: The question of the way in which the department is organised is a matter for the board. I am looking at these matters in the first instance to ensure that proper information is given through the published accounts.

Mr. Michael Foot: Will the hon. Gentleman give the same undertaking about the electricity industry as that given by the Secretary of State for Trade and Industry about the steel industry; namely, that before making any proposals for the alteration of the structure of the industry he will have consultations with the representatives of the workers in it?

Sir J. Eden: Yes, certainly. I have already had the pleasure of meeting them once, and I gave them that undertaking.

Consumer Council

Mr. Arthur Davidson: asked the Secretary of State for Trade and Industry from what organisations he has received representations with regard to the decision to end the grant to the Consumer Council; and what replies he has sent.

Mr. John Davies: Representations have been received from a small number of consumer organisations and one other body; the replies explain the reasons for the Government's decision.

Mr. Davidson: Has the Secretary of State's attention been drawn to the statement made yesterday by the Consumer Council to the effect that many firms have already started to round-up prices in anticipation of Decimal Day? What body does he think can replace the Consumer Council in the day-to-day alerting of the public to unjustifiable price increases? I hope that he will not say that it will be the Consumers' Association, because that association has already said that it cannot carry out the work done by the Consumer Council.

Mr. Davies: The Government's view is that the strengthening of protective

measures which has taken place over recent years, coupled with the emergence and development of voluntary consumer organisations, affords a considerable degree of protection for the consumer.

Mr. Kenneth Lewis: I recognise the demise of the Consumer Council—it was a quite correct decision—but will my right hon. Friend nevertheless, through both Government and industry, seek to support the Consumers' Association so that it can take over some of the other work?

Mr. Davies: The Government will certainly encourage any body that is seeking voluntarily to help the consumer.

Hire Purchase

Mr. Arthur Davidson: asked the Secretary of State for Trade and Industry whether he will introduce legislation to amend the hire purchase laws.

Sir J. Eden: This would not be appropriate in advance of a detailed study of the Report of the Committee on Consumer Credit, which is expected to be ready very shortly.

Mr. Davidson: I appreciate the Minister's reply in that respect, but will he bear in mind that most hire-purchase agreements are completely incomprehensible to me, and to the average man in the street—[Interruption.]—and to lawyers? Will he give an undertaking that he will study the Crowther Report as a matter of urgency?

Sir J. Eden: I have great sympathy with the hon. Member on that point. I give that undertaking—as soon as the report is received.

Mr. Biffen: Is it the intention of my hon. Friend that the Government's own observations on the Crowther Report will be published at the same time, or speedily thereafter?

Sir J. Eden: No, Sir. The Crowther Report will first need a certain amount of study. Before I can answer my hon. Friend I should like to see the report, which is not yet available.

Aircraft (Hijacking)

Sir J. Langford-Holt: asked the Secretary of State for Trade and Industry whether he will take steps to refuse


facilities at British airports to the aircraft of any country which has given refuge and comfort to hijackers of aircraft in any part of the world.

Mr. Noble: Use of airports for international services is governed by international agreements, and hijacking is an international problem, which I believe is better dealt with by concerted international action on a wide front. Her Majesty's Government are participating in international discussions in which denial of access is one course being examined.

Sir J. Langford-Holt: Is my right hon. Friend aware that this concerted action has been awaited for a long time, and that very little has happened? Is this not one way in which the Government could act quite independently, to advantage? What we fear above all else is that nothing will happen until the next major hijacking incident.

Mr. Noble: I appreciate the fear which my hon. Friend expresses about the dangers of this comparatively new form of hijacking to which we have recently been subjected, but we have acted with our allies and friends in this field very quickly since September. Three or four meetings have been taking place, and one is taking place this week, I think, on the international front. It is essential, where these planes are travelling over and landing at vast numbers of countries, that the action should be taken internationally or it will be no use.

Mr. Mason: Is the right hon. Gentleman aware that the British Airline Pilots Association and its international counterparts are very keen to see an international aerial piracy convention implemented as quickly as possible? What progress is being made in the United Nations and in the International Civil Aviation Organisation on this topic of aerial piracy? When do we expect to see a convention before us, so that we can implement it ourselves?

Mr. Noble: It is difficult to give the right hon. Gentleman an absolutely categorical answer, but a meeting is taking place in Paris tomorrow at which this will be the main issue. If, as a result of that, a convention comes forward, we shall certainly study it, and I hope that

we and many other countries will ratify it quickly. One cannot act much more quickly than that when dealing with a large number of countries and a very difficult problem.

Mr. Jopling: But if the present talks break down without any sensible solution, would my right hon. Friend assure us that he will consider acting unilaterally on the lines that my hon. Friend the Member for Shrewsbury (Sir J. Langford-Holt) suggested?

Mr. Noble: There may be some ways in which we can act internationally, but not, I think, directly in the way suggested by this question.

Mr. Maclennan: While I recognise the impatience that hon. Members have expressed, would the right hon. Gentleman not agree that, since September, there has been major progress internationally, and that there is every reason to believe that the present discussions will be fruitful? Despite that, would the hon. Gentleman not also think it reasonable to press members of I.C.A.O. to sign the Tokyo Convention on crimes committed aboard aircraft, which this country has already ratified?

Mr. Noble: Yes, Sir, I accept that.

London Airport (Noise)

Mr. Spearing: asked the Secretary of State for Trade and Industry what are the technical arrangements for monitoring noise levels of aircraft approaching or leaving London Airport from the east.

Mr. Noble: Noise levels of aircraft taking off are measured at specified points related to the first community overflown. Noise levels on the ground of aircraft on approach are a function of aircraft height, and heights of a sample of approaching aircraft are therefore checked by radar.

Mr. Spearing: But does not the right hon. Gentleman agree that the question was about aircraft approaching London Airport over London and not those taking off? Would he not agree that the Parliamentary Commissioner's Report No. 47 showed that no effective noise monitoring took place? In view of that, would he not make a further statement on how he intends to make noise monitoring effective to the east of London Airport?

Mr. Noble: The hon. Gentleman probably realises that the problem of aircraft approaching is different from that of aircraft taking off because of the pilot being forced to fly on a glide path, and according to the performance of his engine, which may vary from type of plane to type of plane, he is no longer in control of the noise that the engine may be giving off, although there are limits to which he is expected to keep. Therefore, monitoring on approach is much less likely to have a satisfactory and safe result than when taking off.

Mr. Hugh Jenkins: Is it not the case that if the right hon. Gentleman would monitor or instruct that monitoring should be done under approaching aircraft, he would at least know the levels of noise? As it is, is he not depriving himself of essential information? Will he not think about this again?

Mr. Noble: As I said in my answer, a sample of approaching aircraft are checked and the noise levels are not in excess—or only very slightly in excess—of the limits.

Mr. Geoffrey Finsberg: Would my right hon. Friend not agree that one of the problems for many of our constituents is that they are given the most fatuous answers by his Department—and were by his predecessor's Department as well—and are asked to send details? Would he ask his officials how ordinary people can be excepted to be able to give the details required before prosecution can take place?

Mr. Noble: I fully accept my hon. Friend's feeling about some of the replies which one has to send. Not having had one from the right hon. Member for Barnsley (Mr. Mason) when he was President of the Board of Trade, I cannot express any view on that. But the fact which the House has to realise is that the problem of aircraft noise is perhaps the most difficult single subject which anyone could attempt to solve. It cannot at the moment be solved. The frustration people get on receiving official letters is perhaps a perfectly fair result of the difficulties of giving clear-cut answers and making promises which one knows one can keep.

Mr. Michael Foot: Does not the right hon. Gentleman think that it would assist

in overcoming the sense of frustration if he could invent some simple mark which would tell recipients of his letters which of them he thought were fatuous?

Mr. Noble: I did not suggest that any letter sent by my predecessor or myself was fatuous: I merely said that they were at times disappointing, because there are no direct easy answers. If there were, I would be only too delighted to send some letters which would cheer people up a great deal. The difficulty is that if one moves the noise from one area to another to give relief, all one does is get another 50,000 or 20,000 complaints.

Industrial Investment

Mr. Sheldon: asked the Secretary of State for Trade and Industry what is his latest estimate of the increase in industrial investment during 1970.

Mr. John Davies: I would refer the hon. Member to the reply given to the hon. Member for Heywood and Royton (Mr. Barnett) on 16th November.—[Vol. 806, c. 319.]

Mr. Sheldon: But since that reply was equally unsatisfactory, would the right hon. Gentleman not consider that it is about time that he came up with proposals for improving industrial investment here and now, and not some time later, when the Government's dreamy hopes may have come to a successful conclusion? What is he doing about industrial investment here and now?

Mr. Davies: Certainly not indulging in dreamy hopes. The arrangements which the Government have produced are, as the hon. Gentleman knows, part of a general plan of action. One of the major problems lies, of course, in the question of liquidity, where the proposals of the Government in relation to corporation tax should have a real effect.

Mr. Bruce-Gardyne: Would my right hon. Friend not agree that with the present rates of wage costs and inflation it is inevitable that the margins for future investment should be further eroded, and if hon. Gentlemen opposite are concerned about levels of investment, should they not direct some of their concern to their paymasters in the trade union movement?

Mr. Davies: I certainly concur that the current wage inflation is undoubtedly having a very deterring effect on the prospects for investment and that any relief of that would have a signally advantageous effect on the whole outlook.

Steel Prices

Mr. Sheldon: asked the Secretary of State for Trade and Industry what further action he will be taking to control steel prices.

Mr. John Davies: The British Steel Corporation has made no proposal for a further increase in prices.

Mr. Sheldon: But, with respect, that does not answer the question. What is the right hon. Gentleman's policy going to be if monopolies take advantage of their position to raise prices? It is useless to refer this to the Monopolies Commission, because we cannot wait three years for a report. What action will he take if any monopoly raises its prices unjustifiably?

Mr. Davies: In regard to the British Steel Corporation, to which the original Question related, I exercise a careful scrutiny of all proposals that the corporation—or any other nationalised industry under my charge—makes for price increases. The answer to the question, of course, is that at the moment there is no such proposal from the British Steel Corporation, so I have no particular standing in this issue.

Mr. Michael Foot: Can the right hon. Gentleman say whether he is now trying to keep steel prices down, as the Prime Minister said before the election, or pushing them up, as he himself indicated to the Foreign Policy Association a week ago?

Mr. Davies: I am certainly not seeking to push up steel prices.

ROLLS-ROYCE (LAUNCHING AID)

The following Question stood upon the Order Paper:

121. Mr. JEREMY THORPE: To ask the Secretary of State for Trade and Industry what part the Bank of England has played in helping to raise the £18 million private capital provided for Rolls-Royce.

Mr. Speaker: I understand that the Secretary of State for Trade and Industry wishes to answer Question No. 121.

Mr. John Davies: With permission, Mr. Speaker, I will now answer Question No. 121.
As I informed the House on 23rd November no public funds are included in the £18 million to be made available to Rolls-Royce from sources other than the Exchequer.

Mr. Sheldon: On a point of order, Mr. Speaker. I hesitate to raise a point of order when the Question is being answered, but I put down on Thursday evening Oral Question No. 7 for answer today. One sees from today's Order Paper that for some reason I cannot comprehend it is put down as an Oral Question transferred as a Written Question. Since it seems that the Oral Question is now being answered, a matter of which I had no previous information, it places me at some disadvantage.

Mr. Speaker: I understand that the hon. Gentleman had three Oral Questions down. Two of them remain Oral Questions, and the third becomes a Written Question.

Mr. Davies: I repeat that as I informed the House on 23rd November, no public funds are included in the £18 million to be made available to Rolls-Royce from sources other than the Exchequer. Since, in the absence of any more detailed explanation, there is some risk of misunderstanding, I have obtained the permission of the Bank of England and Rolls-Royce to tell the House that the £18 million included a facility under which banking advances will be available to the company from the Bank of England as well as additional facilities from the company's private bankers.

Mr. Thorpe: I thank the right hon. Gentleman for that statement, but is he aware that some ambiguity remains? First, what are the facilities involved to the value of £18 million? Second, what hat was the Bank of England wearing—that of a private banker acting at the request of clients or that of a nationalised institution acting on the instructions of the Governor? Can he say whether this sum—or, indeed, any other sums advanced—has been guaranteed by the Bank of England and, if so, from what


resources? Would it not have been more helpful if the right hon. Gentleman had been a little more forthcoming about this matter on 23rd November?

Mr. Davies: On the date in question I was in the difficulty that I had no authority from the concerns involved to reveal anything and these are matters that are in confidence with them. I fear that for this self-same reason I cannot define the precise amount of the facility: this is a matter of confidence between any company and its bankers.
As to the second part of the right hon. Gentleman's question, the Government certainly did not put pressure on the Bank at any time to make a loan itself. The question of guarantees is primarily a matter for the Bank of England, but I understand that it has not guaranteed the facilities from the private bankers.

Mr. Thorpe: The right hon. Gentleman has been kind enough to answer a question I did not put to him, so I repeat my second question. What hat was the Bank of England wearing? Was it that of a private banker acting at the request of clients, or was it that of the Bank of England acting in its capacity as a nationalised institution, with or without Government instructions, on the instructions of the Governor?

Mr. Davies: It is difficult for me to say exactly in what guise the Bank saw itself acting, but it was acting as a banker. It was therefore not drawing upon its public institutional character in this particular operation.

Mr. Sheldon: Will the right hon. Gentlemen say what conversations the Government had with the Bank of England prior to this loan being made? Will he accept also that the fact that it was stated that the backers were private must have had some impact on shareholders who would have been wrongly assured by the fact that private money was available for this operation, and that it would be a material factor in their deciding their own interests? Will he see that when he next comes to the House he is rather more forthcoming than he was on this occasion? In these matters the House of Commons has a right to know who are the partners of the Government and their names and the terms should be made

known before public money is allocated in this way?

Mr. Davies: As to the first part of the hon. Gentleman's supplementary question, there were frequent encounters between some members of the Government and the Bank of England—HON. MEMBERS: "Oh."]—largely with a view to trying to mobilise the forces of the City within this whole field. I cannot accept that I was not as forthcoming as I could be on the day in question, because the hon. Gentleman does not seem to realise that the degree of confidentiality which extends to affairs between a private company and its bankers is very real.

Mr. Emery: I accept immediately that my right hon. Friend and his Department were having frequent discussions on the financial factors between the Bank of England, the City and Rolls-Royce, but can he tell the House whether or not, when the Bank decided to make this money available to Rolls-Royce, the Government were then consulted and gave their permission?

Mr. Davies: The question of permission was not involved because the Bank was not, as I have said, acting as a public institution in this particular case. Permission was therefore not involved. Agreement clearly was, because that involved the question of a total amount going towards the support of this project.

Mr. Harold Wilson: While thanking the Secretary of State for being more helpful to the House on this occasion—indeed, quite helpful to the House—may I ask him whether he is aware that in the statement made to the House by his right hon. Friend the phrase was used that the money was put up by "the banks", and that this was understood widely, both in the House and outside, as meaning the joint stock banks and the merchant banks? There was no question of the Bank of England being involved.
Is the right hon. Gentleman further aware that last week he confirmed Press reports that he himself referred to private banks and, manifestly, the Bank of England is not a private bank?
Further, will he say, since it appears to be the policy now to scrap the I.R.C. and to use the Bank of England instead, what discussions there were with the


Bank of England on the initiative of the Government, and which Ministers put pressure on the merchant banks to put up money which, being refused, led to the Bank of England putting up the money?

Mr. Davies: When the expression "the banks" was used it would cover a very wide field—[Interruption.] I think that, in fairness, the right hon. Gentleman would agree that in answering the question, which I think he had himself put, I was not prepared to undertake that no public institution was involved. That was the reason therefor.
The position of the Bank of England is something of a borderline question when it operates in the private banking field. When it operates in this field it is acting not as a public institution. As to who was consulted, a very large number of private bankers and the Bank of England were consulted in the City.

Mr. Wilson: I thank the right hon. Gentleman, but I do not think that he has answered the last part of my question—though I agree that it consisted of two or three questions. I asked which Ministers put pressure on the consortium of merchant banks to lend money, the result of their rejection being the Bank of England itself being pressed to put up money. Will the right hon. Gentleman say which Minister spoke to those banks?

Mr. Davies: The right hon. Gentleman has it wrong. The contact of Ministers was with the Governor of the Bank of England who was asked to exercise what seems to be a very appropriate function, which was to contact the banking community.

QUESTIONS TO MINISTERS

Mr. Michael Foot: On a point of order, Mr. Speaker. May I ask whether you have received a request from the Secretary of State for Trade and Industry to answer Question No. 122 about the future of the steel industry? This morning I communicated with the right hon. Gentleman's Department and he sent me a most courteous reply explaining the reasons, as he felt, why he did not at that time wish to make a statement. As my

Question to him is a new Question and since it is certainly most grievous to the steel industry that wilder and wilder rumours should be spread on what is to happen to it, and since this is a serious matter on which a statement should be made to the House of Commons, may I ask whether you have had a request from the right hon. Gentleman suggesting that he has reconsidered the letter he sent me earlier? [Interruption.]

Mr. Speaker: The hon. Gentleman's request is perfectly in order. I have had no such request from the Minister.

Mr. Buchan: On a point of order. I am seeking your guidance on a specific matter. This morning I sought to put down a Private Notice Question

Mr. Speaker: Order. The hon. Gentleman knows that he cannot raise in the House the question of the refusal of a Private Notice Question. This is something which is given to Mr. Speaker.

Mr. Buchan: Further to that point of order. I was not in any way questioning the refusal. On the contrary, I understand your difficulties, especially as the question of Ministerial responsibilities arises. What I hope for is some guidance as to how the matter can be proceeded with in the House. Perhaps, for example, the Leader of the House might ask his right hon. Friend the Secretary of State for Defence to make a statement to allay the grave disquiet felt in the West of Scotland because of this incident and perhaps let us know of the nature of the liaison in the event of such an amalgamation between our own defence forces—our civil forces—and the Polaris vessels. There is grave disquiet in the whole of the West of Scotland. The Leader of the House is present and I hope that he will prevail upon his right hon. Friend to make a statement.

Mr. Speaker: The Leader of the House will have heard what the hon. Gentleman said. I appreciate his difficulties but it is not a matter for me. If he comes to the Table he might be able to get some advice—and from his parliamentary colleagues, too—on how he can raise a matter which is rather difficult to raise.

Mr. Hugh D. Brown: Further to that point of order. Could I plead with you Mr. Speaker, to accept that this is a


genuine case of seeking after information? There is public disquiet in Scotland on this matter and while the public outside can discuss the situation through the Press and television it does not reflect any credit on Parliament that we find ourselves unable to raise a matter of great public interest. It would be wrong for us to ask a Private Notice Question directed, presumably at the Secretary of State for Scotland, because the Argyllshire Police were involved in this incident. I hope you will appreciate that we are seeking guidance on a question of public concern about who must accept responsibility to this House and enable Members to ask legitimate questions.

Mr. Speaker: The hon. Gentleman has emphasised the point which his hon. Friend has made. On the general issue of Private Notice Questions, every hon. Gentleman who seeks to put a Private Notice Question considers it of vital importance. I have to turn down quite a number each week.

MERSEY DOCKS AND HARBOUR BOARD

The Minister for Transport Industries (Mr. John Peyton): May I begin by offering the right hon. Gentleman the Member for Sheffield, Park (Mr. Mulley) my profound apologies for the fact that arrangements which were carefully made for the transmission of copies of this statement to him and his colleagues miscarried slightly. If they were late I am sorry.
With permission, Mr. Speaker, I should now like to make a statement about the Mersey Docks and Harbour Board.
As the House is aware, the Mersey Docks and Harbour Board is in serious financial difficulties. The Board first came to see me at the end of July and, at my suggestion, appointed consultants to examine its financial position.
The Board informed me earlier this month that it had decided on far-reaching steps to restore its revenue position, but was faced with cash deficiencies totalling some £20 million over the next three years mainly to meet bond redemptions falling due in that period. It envisaged two alternative ways of dealing with this. First, Government bridging loans or

guarantees to cover the expected deficiencies. Failing these it recognised that some form of moratorium on the repayment of bonds and interest would be necessary, together with a revision of its capital structure. It later became clear that, even if this was done, it would still require some means of dealing with smaller but still substantial cash deficiencies over the months until a Bill promoted by it could become law.
Some of the major users of the port, with whom I have held discussions confirmed at a meeting this morning that they could not help with bridging finance.
The Board announced on Friday that it was, as a preliminary measure, depositing a Bill to provide for the reconstruction of the Board's capital debt and interim changes in the composition of the Board. It added that ways were being explored of obtaining sufficient finance to meet the Board's commitments, including maturing bonds, until the time that the Bill could be passed into law. On the same day I communicated to the Board the Government's decision that it would be inappropriate and contrary to their general policy to make any contribution towards the bridging finance.
The Board has agreed to co-opt immediately Mr. John Cuckney and Sir Matthew Stevenson and to elect them as Chairman and Deputy Chairman respectively. They replace Mr. Joseph Taylor, who has had to retire on health grounds, and Sir Joseph Cleary, who told me that he was ready to take any step, including giving up the post of Deputy Chairman, to help the recovery of the port to which he has given such devoted service. I would like to offer my sympathy to Mr. Taylor and to thank him and Sir Joseph Cleary for the part they have played during what has been for them a very painful period.
The Board has agreed to delegate its main functions to a small Executive Committee led by Mr. Cuckney and Sir Matthew Stevenson. The Committee will also include Mr. Emerson of I.C.I. and Mr. Wall of the Transport and General Workers' Union, both of whom are at present members of the Board; they will be joined by Mr. R. L. E. Lawrence (General Manager of the London Midland Region of British Railways) and perhaps one or two others.
The Government have already agreed that their loans made before the deposit of the Bill shall be written down in the same way as the private capital. We are also prepared to enter into new commitments to provide loans for the completion of the Seaforth scheme as at present planned and for other approved capital works.
This still leaves the problem of dealing with the cash deficiencies which the Board foresees in the first half of 1971. The Government have decided to apply for the appointment of a receiver of the rates. This is intended to protect the financial interests of the Government and the other secured creditors. It is important to understand that such an appointment would not and could not be for the purpose of winding-up the undertaking; on the contrary, the object would be to secure the payment, out of the rates, of the expenses necessary for the continued operation of the Port.

Mr. Mulley: I am grateful to the right hon. Gentleman for his explanation for the delay in our receiving a copy of the statement. I accept his apology.
The right hon. Gentleman will be aware that this is a very serious statement which we shall need to consider very carefully. May I ask him even at this last moment to reconsider his decision not to make some bridging finance available so that our major port shall not have the indignity of being run by a receiver?
What is the right hon. Gentleman's assessment of the impact of this matter on the future income of the employees of the Board? What does it import for the future of the Board's pensioners? In view of this serious development on Merseyside and the right hon. Gentleman's recent remarks to the Institute of Transport, is it not urgent that we should have the Government's promised statement on their future policy for the ports so that we can debate what they intend?

Mr. Peyton: To answer the last question first, I have recently had some recommendations from the National Ports Council on ports policy generally, and I am considering these as a matter of urgency. I do not regard, and never will regard, nationalisation of the ports as being anything approaching a helpful solution.
The right hon. Gentleman suggested that the port of Liverpool would now experience the indignity of being run by a receiver. That is wrong; it is a misconception of what has happened. A receiver in the case of a statutory trust port, as is Liverpool, will be a receiver of the rates only. He will not be responsible for the management of the port, nor will he be able to have recourse to the assets of the port. He will simply receive the rates.
I acknowledge the importance of the points raised by the right hon. Gentleman about workers and pensioners. The Government believe that the arrangements I have outlined offer the best prospect for the port, but this is a time for realism all round. Perhaps we could all learn some rather bitter lessons from the past.
I am sure that the right hon. Gentleman will join me in expressing the hope that everyone concerned with the port will now do their best to ensure that it has a future.
The point raised by the right hon. Gentleman about the pensioners is one with which I am particularly concerned. I expect, and I am advised, that the receiver will have power to pay these. Should matters turn out otherwise, I should need to reconsider the position.

Mr. Selwyn Lloyd: I warmly welcome the Government's support for the Seaforth scheme, but will my right hon. Friend bear in mind these considerations? First, the port of Liverpool must continue. It is physically possible for only a very small proportion of the cargoes that go in and out of the port to be handled at other ports. Second, it is absolutely necessary that the position of the pensioners should be safeguarded. Third, in handling the question of the bonds, I hope that my right hon. Friend will have regard to the credit-worthiness of this sort of public utility. Finally, far-reaching plans have been made to change this very large deficit into a surplus, plans which will need, as my right hon. Friend said, realism on the part of all concerned. Does not my right hon. Friend think that there will have to be some sort of bridging arrangement until those plans can be put into effect?

Mr. Peyton: On the question of Seaforth, the Government are committed to a total expenditure of nearly £40


million, of which about £16 million has already been spent. This leaves the Government still with the prospect of finding another £24 million for the Seaforth dock.
I accept what my right hon. and learned Friend says about the importance of the port of Liverpool. Indeed, 24 per cent. of our general cargo exports go out through the port and a very substantial share of our crude oil imports comes in through the Mersey.
I have already commented on the position of the pensioners, and I note what my right hon. and learned Friend has said. I note also what he has said about the bonds and I recognise the importance of the issue of credit-worthiness.
On the question of converting the deficit into a surplus, since the Board received the report of the consultants there has been an increase in charges of 25 per cent. and a further increase is in contemplation, and the Board is making arrangements to dispose of surplus land and assets. I believe that the Board has made in the past few weeks a very realistic attempt to grapple with its problems and I hope that the Committee to which I have referred in my statement will be able to take those efforts a good deal further.

Mr. Heffer: Will the right hon. Gentleman explain to the House how the proposals he has put before the House will help forward the development and expansion of the port of Liverpool? Is he not starting this the wrong way round? Will he look at the Touche Ross report issued in January to the National Ports Council, which concludes that the four continental ports which were studied had a massive advantage over the ports of London, Liverpool and Southampton because of the immense financial assistance granted to those four continental ports by the continental governments concerned? Is not the right hon. Gentleman's decision to put the port of Liverpool into the hands of the Official Receiver—even though perhaps a bridging operation—a scandalous one and an abdication of responsibility by the Government?

Mr. Peyton: I am conscious of the fact that the hon. Gentleman can play a very important part in the future of the port of Liverpool, but I hope that he will try to pursue some slightly different course

from that he has embarked upon in his supplementary question.
There is no question of the Official Receiver being involved in this. The Official Receiver is concerned with the winding-up of companies. I have tried to make it clear to the House that with a statutory trust company no ordinary wind-up procedure is even possible and that the receiver the appointment of whom the Government now seek is appointed to receive the rates only and is not concerned with the management of the port, has no powers to wind it up, nor can he have recourse to the assets.
The hon. Gentleman asked what there was in my announcement that offered a prospect for the development and expansion of the port of Liverpool. I must tell the hon. Gentleman that in my view the prospects for the expansion and development of the port of Liverpool reside in Merseyside and not in Ministers.
The hon. Gentleman mentioned the question of subsidies. I do not expect the hon. Gentleman to agree with me, but I believe that the country has become sick of subsidies, and it is time we got away from them.

Mr. Tilney: As Merseyside, where tens of thousands are affected directly or indirectly by the Dock Board's difficulties, must apparently now find its own solution to a problem which, even through only a partial default by the Board, threatens, in the view of some investors here and overseas, the credit of all Merseyside local authorities, will my right hon. Friend consult his Ministerial colleagues as to the quickest means of giving the eight authorities with which the Board deals the powers to guarantee, if they so wish, in appropriate fractions the capital and the interest of any new borrowings by the Board, in the same way as some European bonds were guaranteed by countries, including Britain, before the war?

Mr. Peyton: I am grateful to my hon. Friend for his suggestion. I have been in touch with the local authorities. Indeed, I saw them when I was in Liverpool on a recent visit. I will certainly take account of what my hon. Friend has said. If the local authorities concerned should wish to see either my right hon. Friend or myself, we would be delighted to see them.

Mr. Dell: Can the right hon. Gentleman make a categorical statement on the subject of pensions? Is he not aware that statements were made to pensioners about the future of their pensions and it is time the Government made a statement to give pensioners security in what they have earned? Regarding the future of the port, is it not the practical situation that the Government have taken over the running of the port without being willing to provide the finance necessary to sustain a proper level of activity and, in a sense, have tried to force private institutions and individuals to produce the money which the Government refuse to produce and which they should produce?

Mr. Peyton: The steps that I have announced today are steps which I have taken with great reluctance but which I believe to be for the benefit of the port. I assure the right hon. Gentleman that there is no intention on my part or on the part of the Government generally to become immersed in the minutiae of running the port. That is why I sought as early as possible to obtain an executive committee which will take the full responsibility upon its shoulders.
As for the right hon. Gentleman's point about pensions, I understand his concern about this, of course. But I think that I should not go beyond what I have said already, namely, that I am advised that there is no reason why the receiver should not pay out these pensions. If matters should turn out otherwise, I will of course urgently look at the position again.

Mr. Marples: Will my right hon. Friend agree to call a meeting of all those interested on Merseyside, including the business community, the Chamber of Commerce, all local authorities and workers in the docks, to see whether all interested would make a contribution to the finances, and then reconsider his decision about the finances?

Mr. Peyton: I understand my right hon. Friend's concern about the situation. He has been in touch with me a number of times during the past few weeks. I could not undertake to reconsider my decision, though I would be willing always to meet my right hon. Friend or any representatives of Merseyside to examine any suggestions that they may make or look at their anxieties.

Mr. Dunn: Is the right hon. Gentleman aware that there is considerable doubt and anxiety about whether, in the case of a statutory port trust, the appointment of a receiver is legal, and that that doubt is based upon the 1858 Act and on the revision of the Mersey Docks and Harbour Board provisions in 1965? Will the right hon. Gentleman look further at the financial problems, bearing in mind that the Mersey Docks and Harbour Board has no way of raising money in the interim pending the introduction of its new Bill and its acceptance by this House? Is he aware that his announcement creates great problems, and will he look again at the possibility of making available bridging finance?

Mr. Peyton: The hon. Gentleman properly raises a point about the uncertainty of the law. I cannot go further today than say that I am advised that the procedures now undertaken are perfectly proper and likely to be successful. The hon. Gentleman's other point is the same as that raised by hon. Members on both sides, asking me to reconsider the Government's decision not to provide bridging finance. I am afraid that I cannot do that.

Sir G. Nabarro: While congratulating my right hon. Friend on the financial propriety of all that he has said today, which is exactly in consonance with the new direction of this Government's policy, having regard to the fact that no finance will be available from the central Government, can my right hon. Friend say what steps he is prepared to take to collaborate with the Mersey Docks and Harbour Board and other interested authorities, including local authorities, to raise the necessary finance on the open money market and pay the appropriate rate for it?

Mr. Peyton: All that I can say in answer to my hon. Friend is that the port of Liverpool will need a better financial position before it can go to the money market. As for the point about safeguarding the cash flow and raising money for the Board's current requirements, I ought to make it clear that if a receiver is in post he will receive the charges of the port, and having paid the outgoings, will make available to its secured creditors, including the Government, such balance as may be available. Thus, the


cash requirements of the port will be looked after from current earnings.

Mr. Ogden: Will the right hon. Gentlemen compare the strident demands made by Conservative hon. Members representing Merseyside constituencies that the Labour Government should help Cammell Laird with their abject acceptance of his statement today? Is it correct that the proposals which the right hon. Gentleman made to his right hon. Friend and overlord and the Cabinet were a good deal more favourable and helpful than the decision that he has had to announce today? Can he deny that there is no significance in the fact that this new example of Conservative economic policy for development areas is not being used to benefit an area which contains some of the strongest and most loyal supporters of the Labour Party?

Mr. Peyton: I dismiss that last remark of the hon. Gentleman as being rather unworthy of him. On the general point, I can only say that what I have announced I believe to be for the benefit of the port of Liverpool—[Interruption.] I am sorry that the hon. Gentleman persists in ignoring what seems to be an important point of substance, namely, that the Government are in process of investing £40 million in the creation of Seaforth. The hon. Gentleman chooses to put that on one side as being of little importance—

Mr. Ogden: With respect, it is a first-class development. Some of us went to see it a little while ago. It is fine. We have to ensure that those dock gates are kept open.

Mr. Peyton: The Government are providing a £40 million key.

Mr. Pardoe: Will the right hon. Gentleman go a little further on his consultations with local authorities? Has lie been made aware by local authorities in the area that, with his help, they would be prepared to provide bridging finance? What discussions has the right hon. Gentleman had with the North-West Economic Planning Council about the effect of his decision on the economy of the North-West in general and the development area in particular?

Mr. Peyton: I hope that the Chairman of the Council, whom I saw not long

ago, will not hesitate to let me know his views now that I have made this announcement. I am sure that he will not. I do not think that I can usefully add to what I have said.

Several Hon. Members: rose—

Mr. Speaker: Order. We must move on.

Mr. Heffer: On a point of order. I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the refusal of the Government to give financial aid to the Mersey Docks and Harbour Board to enable it to continue its day-to-day operations without a receiver, thereby placing the future of the Port of Liverpool and of the whole of Merseyside in grave jeopardy.
This is a specific matter because we are here dealing with the second largest port in Britain and the port which handles the biggest volume of exports. It is a matter of the most vital importance, not only to the future of Merseyside but to the economy of the whole country.
The point made by the Minister for Transport Industries that the Government are continuing their financial support for the Seaforth project is merely the continuation of the policy of the previous Government and has nothing to do with the day-to-day work of the port of Liverpool.
The second point that I would make is that it is important because, if immediate financial assistance is not forthcoming, the port can and I think will find itself in grave difficulties; because many of the workpeople could be thrown out of work in an area which has already high levels of unemployment; and because the Government have given a very narrow interpretation of Section 11 of the Harbours Act, 1964.
For those reasons, I urge that the House should be allowed to debate this matter at the earliest opportunity.

Mr. Speaker: The hon. Member for Liverpool, Walton (Mr. Heffer) asks leave to move, under Standing Order No. 9, the Adjournment of the House for the purpose of discussing a specific and important


matter that he thinks should have urgent consideration, namely.
the refusal of the Government to give financial aid to the Mersey Docks and Harbour Board to enable it to continue its day-to-day operations without a receiver, thereby placing the future of the Port of Liverpool and of the whole of Merseyside in grave jeopardy.
I am satisfied that the matter raised by the hon. Member is proper to be discussed under Standing Order No. 9. Does the hon. Gentleman have the leave of the House?
The leave of the House having been given—

Mr. Speaker: Leave having been given, the Motion for the Adjournment will now stand over until the commencement of public business tomorrow, when a debate on the matter will take place for three hours under Standing Order No. 9(2).

The Motion stood over under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) until the commencement of public business Tomorrow.

BILL PRESENTED

CRUELTY TO ANIMALS ACT, 1876 (AMENDMENT)

Mr. Richard Body presented a Bill to amend the Cruelty to Animals Act, 1876: And the same was read the First time; and ordered to be read a Second time upon Friday, 11th December, and to be printed. [Bill 59.]

CONSUMER PROTECTION AND COST OF LIVING

4.11 p.m.

Mr. Alfred Morris: I beg to move,
That this House deplores the failure of Her Majesty's Government to protect the consumer, as shown by its abolition of the Consumer Council, it unconcern about rising prices, the introduction of import levies on food, increased charges for public services and the cutting of housing subsidies; and calls upon Her Majesty's Government to refrain form imposing further burdens on the housewife such as a value added tax.
There is a dark rumour, happily unconfirmed, that I am to be excluded from Private Members' Ballots. I readily concede that it is most unsual, not to say a parliamentary happening, for anyone to win first place in the Ballots both for Private Members' Bills and Private Members' Motions within the space of a single year. But, Mr. Speaker, the frequency of my success in these Ballots is as much your doing as mine.

Mr. Speaker: Mr. Speaker refuses to accept responsibility.

Mr. Morris: I merely pick a number. It is your hand, Mr. Speaker, which has the far more important function of picking numbers out of the hat. If ever we can devise a system for basing the allocation of private Members' time not on luck but on the quality of an hon. Member's ideas, it will have my full support. Meanwhile, Mr. Speaker, long may our felicitous division of labour continue.
One of the big decisions for any Private Member who wins the Ballot is whether to make his Motion controversial. Mine may possibly become deeply controversial between the parties in this House; but I am certain that the electors outside, of whatever party, will regard the Motion as being both reasonable and timely. It is reasonable because the party opposite made prices the dominant issue in the recent General Election. Moreover, against the background of mounting inflation, it could hardly be more timely. As Sir Roy Harrod has said, the Government's position now is that they recognise inflation to be the greatest evil but intend to do nothing about it.
But first, let me deal with what Dame Elizabeth Ackroyd terms the "brutal murder" of the Consumer Council. It


was a murder preceded by the most blatant act of electoral deception and cheating because, in their pre-election campaign guide, the Conservative Party patted themselves on the back with these words:
In 1963 the Conservative Government set up the Consumer Council, which has since proved to be a powerful and influential spokesman for the interests of the consumer.
Who, reading those words, could possibly have guessed that one of the Conservative Party's first actions, if returned to government, would be to liquidate—at a stroke, as it were—the Consumer Council? Yet the blow was struck by the same right hon. Gentleman who, as the national chairman of his party, was personally in charge of the Conservative Central Office when its campaign guide was published earlier this year.
Without even the semblance of an apology for misleading the electorate, the right hon. Member for Altrincham and Sale (Mr. Barber) reported the Council's demise in his first major statement as Chancellor of the Exchequer on 27th October. The official announcement said:
The Government have decided that the grant to the Consumer Council should be discontinued. It follows that the Council will cease to exist.
In recalling the right hon. Gentleman's responsibility for his party's campaign guide, any self-respecting industrial worker would have demanded "dirt money" for doing a job as unwholesome as that. One knows there to be hon. Members opposite who privately agree that the financial saving is as derisory as their party's volte face is despicable. I hope that some of them may have the opportunity to speak their minds in this debate. It would help to retrieve at least some vestige of honour for their party if they did.
There are hon. Members in all parts of the House who have had first-hand experience of the Consumer Council's fearless campaign for fair trading and fair dealing. I myself received considerable help from the Consumer Council with my Home Buyers (Protection) Bill. The scheme which now operates to protect home-owners against the nightmare of shoddy building is due in no small measure to the Council's very close

interest in my Bill. Among many other achievements, the Council can be especially proud of the leading part it played in banning the sale of flammable nightdresses for children, in campaigning against landlords who overcharge for electricity and in shielding deaf people from the high-pressure selling of hearing aids.
Who will have the duty of proposing such reforms in future? As Dame Elizabeth Ackroyd has said, they will not come through competition. Nor will they be put forward by Government Departments without a goading voice to stir them.
Meanwhile, the Consumer Council's disappearance means an abrupt end to its plans for helping the consumer to get justice for small claims, for improving the supply of educational material for schools, for the improvement of safety standards — particularly of electrical supply—for persuading suppliers to abolish small-print conditions in contracts, for research into consumer needs and for better labelling, servicing and information for consumers.
In a recent reply—it was an extremely ill-informed reply—to my hon. Friend the Member for Eccles (Mr. Carter-Jones), the Prime Minister suggested that the Consumers' Association could take over the work of the Consumer Council. But Mrs. Jennifer Jenkins, the respected Chairman of the Consumers' Association, had already confirmed that this was impossible. In fact, some of the most bitter criticism of the Government's action against the Consumer Council has come from leaders of the Consumers' Association. In an official statement, the Association described the Chancellor's decision as "shocking" and as an act of "niggardly shortsightedness".
At the Association's recent annual meeting, the decision was described as:
irrelevant, paltry, incomprehensible, ignorant, profoundly regressive and wholly bad".
That is a suitably comprehensive verdict both upon the Government's action in killing the Consumer Council and upon the reply which the Prime Minister gave to my hon. Friend the Member for Eccles.
We need much more consumer protection, not less. Consumer experience in the United Kingdom, as in all industrial countries, is that it is becoming more—not less—difficult to get value for money.


As promotional and selling techniques advance, the public are more—not less—exposed to marketing pressures. The variety of ways in which credit is made available is becoming more—not less—bewildering as goods on the market become more sophisticated in design and use.
With the end of the Consumer Council, many people will say that the answer to these traps for the unwary shopper is to increase controls. But is that the Government's view? The Consumer Council advocated statutory controls only where health and safety were at issue. Its policy was to help consumers to help themselves, by arming them with information and advice, and to stimulate suppliers both to produce reliable products and then tell their consumers the hard facts about them. That is the policy which the Government have now wantonly and thoughtlessly destroyed.
Whose side are the Government on? That of the consumer, or of the hire-purchase firms whose print is as small as their interest rates are large? If the Prime Minister really respects the Consumers' Association, let him now respond to that Association's campaign for the reversal of his Government's decision on the Consumer Council. Let him also recognise that Governments all over the world are now spending more not less on organisations set up to advise and protect the consuming public.
I turn now to the Government unconcern about rising prices, which may by no means be unconnected with the killing of the Consumer Council. On 27th June, the present Prime Minister in his last major speech to the electorate said that the Government would take action "at a stroke" to deal with prices. He now heads the only Government in our history deliberately to have set out to increase prices. He is abolishing not only the Consumer Council but every other safeguard against rising prices, including the early warning system and the monitoring rôle of the P.I.B. in alerting the public to unnecessary price increases.
Having duped the housewives at the election, his pals in industry and finance are now given the freedom to fleece them.
When the Conservative Party was returned to power in October 1951, the Conservatives took pride in their bonfire

of controls, but the party returned at the General Election of June 1970 make the bonfire of their own election addresses. They may point now to some of the fine print in their manifesto, but let them look again at their election addresses. They were elected to deal with prices but have let prices rip. Their financial backers have more than recouped themselves at the consumer's expense. Ask the brewers. Or better still, ask their customers. Indeed, ask the Minister of Agriculture, Fisheries and Food, the right hon. Gentleman the Member for Lowestoft (Mr. Prior). Not that one is likely to get an up-to-date answer from the right hon. Gentleman. While he tells the House of price reductions, the whole of the Press simultaneously gives evidence of price increases As the trade paper The Grocer on 21st November said:
The Minister of Agriculture's surprising statement in the House … has been greeted with more than just disbelief. A puzzled nation is trying to work out Mr. Prior's sum, which, according to some newspaper reports, even Mrs. Prior has found difficult.
One explanation could be that the right hon. Gentleman's tastes are much more eclectic than those of most consumers. Mrs. Prior tells us:
We are probably lucky—we live in the country and grow a lot of our own vegetables, and we shoot pigeons and so on.
Knowing the Minister's room in Whitehall Place so well, I can confirm that the right hon. Gentleman is ideally placed almost to catch his lunch by hand. The House will, of course, recall the right hon. Gentleman's advice, a la Marie Antoinette, but forgetful of the lady's fate, that we should all shop around and try some peaches. Perhaps we shall now be told to make our omelettes with pigeon eggs. Who knows what will issue next from "Peach and Pigeon Prior"?
But the right hon. Gentleman is not quite so ham-handed, certainly not as ingenuous, as he often likes to appear. He knows just as well as the editor of The Grocer that there were 5,044 price increases in groceries alone between 27th June and 21st November. Notwithstanding his instant Press comment over the weekend, he also knows that the effect of the food import levies he plans to introduce next April will be extremely serious for millions of housewives in this country. For the higher food prices he is planning will be in straight addition to


other factors making for price increases. Let it be fully understood that they will be price increases caused, not by any unavoidable change in world conditions, but by the deliberate policy of the Conservative Government. The right hon. Gentleman now tries to spar with my right hon. Friend the Member for Huyton (Mr. Harold Wilson) by saying that his policy is not one of taxing food. Why play with words? It is certainly a policy of higher prices through taxing food imports, as Mr. George Catlin, President of the Butchers' Federation, will tell him.
In a recent interview with Mr. Alex Kenworthy of the Daily Express Mr. Catlin stridently attacked the right hon. Gentleman's policy of deliberately forcing up prices by import levies. In fact, Mr. Catlin let it be known that his Federation would be sending a strong protest deputation to the Minister and he emphasised its view that:
Concentration on high prices to avoid payment of subsidies, without demanding efficient and economic production, is futile and will encourage the wrong type of producer.
I am sure the House will want to hear from the Treasury Bench what reply the Minister gave to that deputation.

The Minister of Agriculture, Fisheries and Food (Mr. James Prior): I can reply now. The same sort of reply that the Opposition gave to Mr. Catlin when they were trying to do precisely the same thing.

Mr. Morris: My right hon. Friend never set out deliberately and comprehensively to increase prices.

Sir Gerald Nabarro: rose—

Mr. Morris: I should like to proceed, because I know there are others who wish to participate in the debate; it has already been foreshortened, which is unfortunate, because this is Private Members' time. However, I will give way to the hon. Member.

Sir G. Nabarro: It is very good of the hon. Gentleman. Would he not recall that the first attempt ever made deliberately to tax food in this country was the imposition of Selective Employment Tax by the Government of his party? [Interruption.] Yes, the first attempt was the imposition of Selective Employment

Tax. Whereas the Tories will cancel it, and reduce the cost of living, his party are enthusiastic supporters of taxing food.

Mr. Fred Peart: Nonsense.

Mr. Morris: I should say that was not the first instance. If the hon. Gentleman for Worcestershire, South will look up the history of the Corn Laws, he will find there are much earlier instances than the one he mentioned.

Mr. Geoffrey Rhodes: The hon. Member for Worcestershire, South (Sir G. Nabarro) should go back to the Library and do some more homework.

Mr. Morris: To revert to my speech, the right hon. Member for Lowestoft's comment was extremely thin. But now that his levy plan has received so much attention in the Press I trust he will be asked by the Leader of the House to come here and make a full and early statement so that we can question him upon it.
Meat is but one of the important commodities which will increase in price as a consequence of the policy on which the right hon. Gentleman has now embarked. The policy will also affect many other major food commodities which form such a big element in the cost of living, particularly for working people. The cost of food takes up much more of the expenditure of the poorer sections of the community than of the wealthier. In the general retail price index, food represents 28·8 per cent. of the total expenditure of households.
For a household consisting of two persons living on a pension, the proportion of expenditure represented by food goes up to 43·4 per cent. For a single person living on a pension, the proportion is 42·2 per cent. These figures are weighted acording to the pattern of expenditure of the various households. There would be special hardship to pensioners and others living on small fixed incomes following the rise in food prices consequent upon the adoption of the import levy system. May we, therefore, be told whether retirement and other pensions will be increased before or after this policy takes effect next April?
Furthermore, the right hon. Gentleman should take an early opportunity of


discussing the effects of higher food prices with Professor Peter Townsend and the Child Poverty Action Group. For the cold, watery porridge of FIS—family income supplement—will become even more offensive to the working poor when his import levies on food take effect. Seeking to minimise the effects of his policy, the right hon. Gentleman says that it will add only 2 per cent. each year to the cost of food over the period of the next three or four years. He then says that these are relatively small increases compared to the increases to which we have become used.
There are, however, five points which must be emphasised in reply. First, his estimate takes no account of any increase in distributors' margins. Second, the increases will be gratuitously imposed by the Government and will be entirely additional to other price increases which are going on all the time. Third, the policy has more to do with paving the way for entry into the Common Market than with the real interests of the British people. Fourth, it makes nonsense to have high food prices at home when abundant supplies are available in the world at bargain prices. Fifth, the increases will be concentrated on essential foodstuffs so that the poorer sections of the community will be the hardest hit.
The right hon. Gentleman, may, of course, be a very strong believer in the Common Market's agricultural régime and he may regard this as a sufficient reason for paving the way for British entry. But if that is his argument let him end the cant of promising to limit the rise in food prices to 6–8 per cent.
The Prime Minister has said again and again that we must come to terms with the Common Market's agricultural régime. But let me quote the recent words of one of the Prime Minister's leading colleagues at the abortive negotiation with the Six initiated by Mr. Harold Macmillan. My source is not a party political figure. He is one of Britain's most distinguished experts on the cost of adopting the Common Market's farm policy in this country.
He tells me:
Wages and salaries must rise to compensate for the rise of 20 per cent. in food prices. So our competitive position in exports both to the E.E.C. and the rest of the world will be worsened. Our competitive position will be made worse still by our being forced

to adopt indirect taxes, like the value-added tax, which will give further wage and salary increases. We could rapidly reach another balance of payments crisis and further devaluation. That in turn would increase food prices still further and you have the prospect of a truly terrifying syndrome.
These are the words of Sir John Winnifrith, for many years until recently the Permanent Secretary at the Ministry of Agriculture, Fisheries and Food, than whom scarcely anyone knows more about the real cost for Britain of adopting the common agricultural policy of the E.E.C. He has been very much more closely involved in detailed negotiation with the Six than the right hon. Gentleman or, indeed, than the right hon. and learned Member for Hexham (Mr. Rippon). Moreover, as I know from working with him for a number of years, he is not given to exaggeration. His words provide the most eloquent possible comment on the Government's attitude to rising prices and their pretence about being concerned with Britain's economic strength.

Mr. Prior: I am grateful to the hon. Gentleman for giving way. If I remember aright, Sir John Winnifrith was Permanent Secretary to the Ministry of Agriculture at a time when the Opposition were in government and when they were as committed as we are now to begin negotiations to join the Common Market. What is he arguing with us for?

Mr. Morris: Sir John Winnifrith has given an account of the effects on the British consumer and the British economy if we enter the Common Market now. I should have thought the right hon. Gentleman would have thanked me for informing him of the views of a civil servant who was so very distinguished a leader of his own present Department.
As the House knows, the rising price of food is far from being the average family's major headache. Nearly every major item of household expenditure is being forced up by the Government's abandonment of their central commitment to the electorate. The halving of the Labour Government's rising annual subsidy to domestic ratepayers, higher charges for school meals, the abolition of free school milk for primary school children over seven, hefty prescription charges and prodigious increases in rents are examples of the heavy burden now facing the average family.
With regard to school meals and primary school milk, I have two straight questions to put to the Government. I should first like to know why, in taking their decision to increase the price of school meals, they appear completely to have ignored the investigation into the school meals service which was carried out by Dr. Bleddyn Davies and Mr. Michael Reddin. The investigation was sponsored as a research project by the D.E.S. and its conclusions were anything but favourable to the price increases which are now in train. We should therefore be told why the report of this important investigation has been set aside: or alternatively what representations the right hon. Lady the Secretary of State for Education and Science has now made to the Chancellor on the basis of this report.
My further question concerns the abolition of free school milk for children over seven. I should like to know whether the decision to end free milk for the over-sevens has at any time been considered by the Committee on Medical Aspects of Food Policy. It was Professor John Yudkin, himself a distinguished member of that Committee, who raised with me the eminently fair point that the Committee might just as well cease to exist if it is not to be allowed to consider matters of such importance to child health in this country. May we now be told whether the Government's decision has been or will be considered by the Committee?
The Motion also refers to the cutting of housing subsidies. The House will be aware that the swingeing cuts proposed will be of the order of £100 million to £200 million a year. We have yet to learn where the axe will fall. But this much at least is clear. The Government's policy is about slashing subsidies, not the provision of adequate housing. It will thus involve even sharper increases in rent than those which have already been imposed or projected.
There is one conspicuous omission from the policy, namely, the future of tax allowances on mortgage interest. These roughly equal in total the sum of Exchequer housing subsidies to councils and the sum of housing allowances paid by the Supplementary Benefits Commission.

Mr. Gerald Kaufman: Before my hon. Friend leaves this point of council house rents, would he consider, as a Manchester Member, asking the Government Front Bench before the end of the debate to give their view on the estimate of the Manchester Evening News, confirmed as realistic by a spokesmen of the Manchester City Council, that their housing subsidy policy will mean an increase on average of £1 a week for each householder in a Manchester Corporation dwelling?

Mr. Morris: I have seen that very disquieting report. I hope that the Treasury Bench will have noted my hon. Friend's question and will see to it that we receive an answer in the course of this debate.
As I was saying, tax allowances on mortgage interest are roughly equal in total to the sum of Exchequer housing subsidies to councils and the cost of housing allowances paid by the Supplementary Benefits Commission. Yet, as The Times noted on 4th November:
… of the three types of assistance, tax allowances in their present form are least directed to those in need. The explanation for the omission is not far to seek, but there remains the anomaly that a Government which advertises its bold and radical approach to questions of public finance and its intention of ensuring that everyone stands on his own feet, if he has any, makes no mention in its opening statement on housing of that third of total public subvention that is of least assistance to the needy.
The explanation "that is not far to seek" is the Conservative Party's almost tribal dislike for council house tenants. Knocking the council tenant has become one of their low-grade parlour games. The golden rule is that you must never allow facts to divert your attention from the play. The fewer the facts at your disposal, the better you will play the game. None of the top players has ever lived in a council house. Nor do they need to know much about the lives of those who do. It is all part of the game to talk of the council estate as if it were a holiday resort for "well-off layabouts" who grow fat on the subsidies they draw from the good old taxpayer.

Mr. Arthur Lewis: I am sure my hon. Friend does not mean to say something that is untrue. He says that they do not understand what living in a council house is like. Yet all the Ministers are living in tied houses


and they have a 100 per cent. subsidy. They know what it is to live in tied houses, and, incidentally, they live there very well.

Mr. Morris: The game that I was talking about is about council houses in which millions of very hard-working people have to dwell.
It is also part of the Tory parlour game to indulge the fantasy of selling all council houses and of making the market for homes as free and competitive as the markets for cars and detergents. According to the earlier rules of the game, one could score heavily by describing the council tenant as a person who kept coal in the bath. But the sport has come a long way since then. To play at all well, one must now see the council tenant as a man with two cars, one a Bentley, and a net income of between £70 and £100 a week.
More important still, one must never breathe the words "Prices and Incomes Board" in the game. The reason for this, of course, is that the N.B.P.I. went near to destroying the game. It did so by publishing a survey of the actual gross incomes of council tenants and their wives in many different parts of the country. Shattering the image of the council-housed Bentley owner, the National Board for Prices and Incomes showed that, in fact, only 1·3 per cent. of husbands and wives had a combined income of over £40 a week. Only 10 per cent. had a combined income of over £30 a week. What was even worse for the game was that these percentages would have been much smaller if tenants living on sick pay and supplementary benefit had not been left out of the survey. The N.B.P.I. also showed that more than 50 per cent. of council households, again excluding the sick and the elderly poor, lived on a combined husband-and-wife income of less than £20 a week, while more than 20 per cent. of husbands and wives earned gross incomes of less than £15 a week. It is facts like these which have brought so many people to dismiss with contempt the whole unfunny game of knocking the council tenant.
Listen, for example, to the normally conservative voice of the weekly journal The Economist:
Does council housing really represent the grotesque diversion of subsidies from the needy to the affluent that the fashionable cry of

'more selectivity' often suggests? Some striking figures from the N.B.P.I. suggest, that, on the contrary, local councils are doing the job of housing the needy more thoroughly than has been supposed.
Again from The Economist:
… there is plenty of evidence in this Report that local authorities really do house a very large proportion of poor people and families with several children.
I shall be grateful if it can be confirmed that the Secretary of State for the Environment will very soon be explaining his policy in much more detail than he has done so far. Meanwhile, perhaps the Chief Secretary of the Treasury will comment on the crucial point about equity raised by The Times. For, while council tenants, because of rebate schemes, usually receive less help as their incomes increase, home buyers may well receive more help as their incomes rise. As the hon. Gentleman knows, the bigger the home buyer's house and mortgage—and the higher the rate at which he pays tax—the more he receives in interest relief. Thus the principal question is: who is subsidising whom? I know that the hon. Gentleman will want to address himself to this very important question if he catches your eye, Mr. Deputy-Speaker.
I turn, finally, to my appeal to the Government to refrain from imposing further burdens on the housewife such as a value-added tax. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) argued with compelling force against this form of taxation in his speech at Aberystwyth on 28th June, 1969. The relevant extract from his speech can be read in my Fabian Research Pamphlet No. 284.

Mr. Ernest Marples: Will a copy be placed in the Library?

Mr. Morris: I have placed a copy in the Library.

Mr. Marples: How much does it cost?

Mr. Morris: The pamphlet costs 3s. and it is entitled "Value-Added Tax: a Tax on the Consumer". My right hon. Friend strongly emphasised that a value-added tax would lead not only to a heavy increase in the number of civil servants and an immense increase in paper work for trade and industry, but also a very sharp increase in prices for many commodities. As the introduction of V.A.T. is one policy which the Conservative


Party did not pledge itself to introduce, I suppose there is now a particularly strong case for considering its implications. Certainly the Prime Minister has given some very equivocal answers in recent exchanges in this House. Is he planning a "VAT 71" or is he not?
As I have shown in my research pamphlet, the first thing to know about V.A.T. is that it is ultimately a tax on consumers and no one else. While every firm, whether manufacturer, wholesaler or retailer, pays tax on the value it adds to any product, it fully recoups itself from the immediate purchaser of its goods. The N.E.D.O. Report on value-added tax, on page 1, describes V.A.T. as:
… essentially a tax which falls on consumer spending, but which is collected in instalments in the course of production and distribution in proportion to the value added at each stage in the process.
Each firm pays the tax authorities the difference between the tax it collects from its consumers and the tax it has paid its suppliers. The manufacturer fully recoups himself from the wholesaler and the wholesaler fully recoups himself from the retailer, who then adds his V.A.T. liability in full to the selling price of the goods in his shop. So the buck, the whole buck, is always passed to the consumer. Up to the point of sale in a shop, everyone has shifted the tax burden forward and recouped himself. But the ultimate consumer, who cannot shift forward and cannot recoup, is left to pay all the tax through higher prices. So V.A.T. is a classical tax on consumption and would almost certainly prove to be the biggest ever shock for shoppers. As a Member of Parliament having close and strong links with the Co-operative Movement, I am extremely concerned at the prospect of a British V.A.T.
Again, it may be argued that we shall have to come to terms with V.A.T. if Britain enters the Common Market, in which the introduction of a multi-stage V.A.T. is now obligatory on every member State. Indeed, our agreement to adopt V.A.T. cannot even arise in the current negotiation. There is unfortunately no half-way house. Supporting entry to the Common Market now means supporting the early introduction of a multi-stage V.A.T. and, equally, since the E.E.C.'s directives on the new tax cannot even

arise in negotiation, rejecting V.A.T. means rejecting the Common Market. The logic is both severe and unmistakable.

Mr. Neil Marten: I understand that in France the standard rate of V.A.T. is 23 per cent. and the higher rate 33½ per cent. What does the hon. Gentleman think would be the average rate within the whole Common Market once all countries pay V.A.T. and we are in the Common Market?

Mr. Morris: I think it is intended that the whole of indirect taxation in the Common Market would be raised through V.A.T. Moreover, it is the French system which appears to be becoming the basis of the common system.
Let me briefly explain why I still maintain my opposition to this form of taxation. Much to its honour, the British Labour movement has traditionally preferred taxing means to taxing essential needs. The preference for relating tax liability to the individual's ability to pay has clearly also been a factor in our movement's strength compared with the democratic labour movements of other countries.
Many of the British Labour movement's achievements in reducing social inequality would have been impossible but for the insistence over the years on evolving a tax structure that is at least moderately progressive. For the higher degree of income redistribution through progressive taxation, the greater the measure of equality that will emerge. It is perhaps no less true that increasing social equality has made it difficult for extremist parties to flourish in this country and easier for our institutions to remain more durably stable and democratic than those of countries which have preferred to raise a lower rather than higher proportion of budget revenue by progressive taxes.
In recent years, the Labour movement's thinking about taxation has become more flexible, but it is still the distinguishing feature of the British democratic Socialist that he will prefer, wherever possible, to avoid taxation of essential needs and choose instead the equity and fairness of taxing people according to their ability to pay.
That is my main case for rejecting the idea of V.A.T. I commend the Motion to the House.

4.50 p.m.

Mr. Selwyn Gummer: I should like to thank you, Mr. Deputy Speaker, for calling me to make my maiden speech. I wish to ask the House for its customary indulgence, even though on this occasion it will be particularly difficult to speak in an uncontroversial way.
I represent a constituency that is particularly affected by the matters raised by the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris). West Lewisham is largely a residential area with a higher than average population of older people and, therefore, the concerns of the cost of living hit them perhaps more directly than they hit other kinds of communities.
This Motion begs a major question, a question to which the hon. Gentleman did not fully address himself, namely how a Government should protect the consumer. This is a basic question, the kind of question to which my predecessor as Member for Lewisham, West, Mr. James Dickens, would have addressed himself with a sturdy independence irrespective of the views of this side of the House or, indeed, of his own Front Bench. I hope that sturdy independence which he represented in West Lewisham will not disappear with the change of régime.
There is implicit in the Motion not only the question, but the answer that the hon. Gentleman would like us to give. Unfortunately, it seems to me that that answer is precisely that which was attempted for over six years by the Labour Government and which was attended by a conspicuous lack of success. Therefore, in addressing ourselves to this Motion it would seem more reasonable not to make apologies for past history, but to try to find a new way of solving the problems which, quite rightly, were highlighted by the hon. Gentleman.
The hon. Gentleman's reference to the National Board for Prices and Incomes reinforces what I have said about his remarks. If we become mesmerised by the easy answer which is very popular with the country on the lines of, "Let us have some kind of automatic panacea; let us have a prices and incomes policy", we know that, after six years, such a policy very soon becomes only an incomes

policy; there is no real effect except to raise prices, and the incomes policy very soon can be proved to increase rather than decrease the way in which incomes rise with the consequent effect on the price spiral.
I notice that there has been a great deal of quoting from the Grocer, a magazine not often quoted by the Labour Party before 18th June. I believe the hon. Gentleman now quotes it to suggest that if only we were to use the same methods as had been used then we will have a great deal of success, though this has not been the case over the past six years. I agree that if the present Government were to use the same methods as were used by the previous Government in the last six years, the present Government containing the sort of people it does, would achieve greater success. But what we need is a different method from that set out in the Motion.
Is it reasonable to suggest that we can protect the consumer unless we are prepared to do something about the reasons why prices rise unnecessarily? One of those reasons is the way in which our industrial situation has caused overmanning in industry so as to make us uncompetitive. I must declare an interest since I am connected with the printing industry, and it is surely unreasonable to have a situation in which every printing press in Britain has more men working on it than is the case on the Continent. Until we solve that sort of problem we will be able to do nothing for the old-age pensioners of West Lewisham, or of anywhere else.
On the matter of social welfare the attitude behind the Motion is that all is well and that we should merely stay in the same place. That is what worries me. The situation is not solved merely by saying, "How appalling it is to change the social welfare system." That is the burden of what is proposed in the Motion. When I go round my constituency I see hundreds of people in private tenancies who need help, and I do not believe that they will regard a change in the system of housing subsidies as being to their disadvantage.
When we find references made to Professor Townsend and the Child Poverty Action Group, we must remember that, even in every one of six years of Labour


Government, child poverty got worse and worse year by year. Nor do I believe it necessary to talk of school milk in the terms used by the hon. Gentleman in moving this Motion when one remembers that school milk was introduced at a time when the major health problem for children in Britain was rickets. Indeed, the major problem today is that of obesity. We have only to look at the evidence to see that that is the case. It has recently been said that nearly one-third of the children of London are overfed. We might well look at that situation in the light of what is said in this Motion.
To go back to housing policy, it would be wrong to face a situation in which we are not prepared to say that, in order to solve the problems which face the nation, in order to do something about the rising cost of living, we should not ask those who are able to do so to stand on their own feet, simply because there are some—and there are certainly some people in this category—who cannot do so.
On the matter of consumer choice, it is curious that we should not allow people to make choices in housing and education, which are important, and then complain when people make trivial choices. This takes away the right of a person to make a meaningful choice.
This Motion not only contains a major question, which it begs, but it gives the wrong answer. Our only choice in solving the problems which face us today is to change the whole nature of our competitiveness. I do not see how the system will work without changing the taxation system to make it possible for companies to improve their liquidity, or to alter the system in such a way as to encourage people by changes in their personal tax situation. Without changing those sorts of things, I do not see how we will avoid the hand-to-mouth system which exists at the moment merely by putting a new subsidy in place of the old. Subsidy is merely a redistribution of present wealth. We want to see an increase in our wealth. This Government have put that matter first and I believe that is the successful answer to our situation.
The hon. Gentleman spent a good deal of his time sniping at the possibility of

Britain entering the Common Market. This was all of a piece with the same argument. He was saying, "Let us stay in the same place. Let us make no major changes. Let us go on like we have always done. Let us not solve the basic problems first." I feel that unless we enter the Common Market on suitable terms, we will be unable to bring about a change in the continuing costs and wages spiral and that this will go on until we find ourselves unable to operate in the world in which we live. The whole proposition in the Motion seems to demand a return to a world of what one might call Socialist myth, a world which may have existed but does not today—a world which can exist only if Governments are not prepared to make fundamental changes in our society.
I believe that the Conservative Party was elected to make these fundamental changes in our society. That means changes, and not just tinkering about with and replacing old ideas that have failed over six years of Labour Government. This can be done only by restoring national competitiveness, by changing the taxation system and by being prepared to provide aid for those who need it—and there are many who do—and, above all, by seeking a new place for Britain in the world by finding an accommodation with Europe so that we can play our full rôle.

4.58 p.m.

Mr. Mark Hughes: May I, as a fellow maiden, begin by congratulating the hon. Member for Lewisham, West (Mr. Selwyn Gummer) on an excellent speech. Were I listening to him in any Chamber but this, I would regard it an honour to call him "my honourable Friend".
I doubt whether there are many Members of this House who have not passed through Durham by train and seen from the railway one of the most beautiful examples of man's handiwork. There is another Durham epitomised for me by the villages of Pittington and Kelloe of which I doubt that many Members have ever heard. These have churches as old as the cathedral, yet the nineteenth century dealt them a heavy blow. These churches were built overlying seams of coal, and pit life, in all its brutality, descended on their rural life. The coal has now gone, the seams largely exhausted; but there remain men in


Durham of quality, hardened in the university of the coal face. It is this inexhaustible seam of humanity which stands in 1970 proud of being of Durham and asking charity of no man and no Government. We in Durham do not ask for any charity; we ask for no special doles for our people. We simply ask to be given the chance to work in a countryside that we love.
Over the last 25 years there have been few more distinguished people from Durham than my predecessor. Charles Grey made a point of serving his people honestly and faithfully, and few can have succeeded better in achieving that objective.
During the previous 250 years my constituency has had the good fortune to be served by a succession of Lambtons, Shaftoes, and the progenitors of a large number of right hon. and hon. Members of the Government Front Bench. But in 1843 there arose among this motley array an unlikely figure, John Bright, at a period when the Corn Laws were at the centre of British politics and John Bright was at the centre of the anti-Corn Law League. It was for the City of Durham that he stood. Yet, again, we see today the spectre of food being taxed in order that the few may live in comparative affluence.
Whatever the particular detailed analytical merits of subsidised agriculture through deficiency payment schemes or through import levies, of the broad outline there can be no doubt: that the function of all agricultural support schemes is to transfer money from one set of pockets to another.
The right hon. Gentleman the Minister of Agriculture, Fisheries and Food has made it clear that he does not intend to diminish the quantum of this transfer. The right hon. Gentleman is not diminishing the amount of money which the agricultural sector is to receive; he is changing the mode by which it is received.
This seems to bring into question how it is done. I should be the first to admit that the problems facing British agriculture under the 1947 Act procedures are considerable. Not least of these problems is the Treasury. We have the problem of raising farm incomes by some means which provide the farmers with security, with long-term prospects, and

yet, at the same time, do not place a burden upon the vast majority of the community which they would find economically or politically intolerable.
I am sorry that the hon. Member for Worcestershire, South (Sir G. Nabarro) is not in the Chamber, since, he having said that we introduced food taxes, I should like to quote from the speech in this House by Sir Robert Peel when he resigned as Prime Minister on 29th June, 1846:
In relinquishing power, I shall leave a name, severely censured I fear by many who, on public grounds, deeply regret the severance of property ties … but … I shall leave a name sometimes remembered with expressions of good will in the abodes of those whose lot it is to labour, and to earn their daily bread by the sweat of their brow, when they shall recruit their exhausted strength with abundant and untaxed food, the sweeter because it is no longer leavened by a sense of injustice."—[Parliamentary Debates, 29th June, 1846; Vol. 87, c. 1054–5.]
It is not use pretending, with the greatest deference, that import levies are other than taxes on food. It may be that levies on food are a proper way of supporting agriculture, but it can only mean that it is a tax on food in the sense that one is substituting the current scheme of an artificially low price for food for a new scheme of an artificially high price for food.
There is not in the world at the moment a genuine free market for agricultural products. Whatever we do, we are faced with agricultural product prices which have a degree of artificiality. The imposition of, say, 3d. a pound on the wholesale price of New Zealand lamb cannot do other than introduce an element of artificially increased high prices. No hiding behind percentage per annum increase rates can get away from the fundamental issue that the Government are currently intent on making food prices unnecessarily high. It may be that they have a good case for doing this, but they cannot pretend that they are doing other than that.
In so doing, I suggest, first, that they do British agriculture a grave disservice. To expect 96 per cent. of the population to continue to pay more for the very necessities of life than they must needs pay will in time lead them to change their minds. They will not continue to


pay. They will exercise their perfectly proper political right of saying, "No".
The great strength of the 1947 Act lay in the bipartisan approval that for 20 years it has received. To bring this whole operation once more into the centre of political debate does British agriculture no service at all.
Secondly, to raise grave fears among our traditional suppliers of food—I note, in a Written Answer which I recently received from the Foreign and Commonwealth Office, that the Argentine was not present at the recent negotiations with our meat suppliers into the possible reallocation of import levies—to arouse such disquiet wantonly in order to increase the food levies and decrease others, is curious to say no less.
Finally, to introduce a scheme whereby the taxation of food, which is the archetype of regressive taxation, is substituted for albeit an inefficient and difficult process whereby agriculture is supported out of general taxation cannot be other than a most dangerous precedent. How can we argue against the potential imposition of tariffs by the United States when we are about to introduce them ourselves on that which we are importing from the United States?
I have great admiration for the officials of the Ministry of Agriculture, Fisheries and Food, but how can they work out the alterations in the price relatives between agricultural products so that, by imposing a levy of £X on maize, they can say how much has to be put on poultry imports so that the balance between imported and home produced poultry is not altered? Such highly technical problems, once one introduces levies, spread right the way through agriculture.
The history of the working of the Common Market agricultural policy over the last 10 years, and of the individual countries right back to 1945–46, is a standing example that levies and import quota restrictions carry with them more problems than they solve. How many thousands of tons of butter lie waiting for someone to eat it in the vaults of the Common Market? What is the cost to those countries? I do not mean this in any partisan sense—please accept that; it is simply that, for my sins having had to

lecture on agricultural economics, I find that it is a most difficult way, historically to achieve agricultural support and that the only logical explanation I can now come to is that, having decided to pay the price for entry to the Common Market before we have even decently entered upon negotiations, we are falling back upon medical diagnostic procedures—that if we are inoculated now with the whips we shall not feel the stings of the scorpions when we enter. I have no desire to be amongst the recipients of either the whips or the scorpions' stings.

5.12 p.m.

Mr. Ernest Marples: It falls to me, in making what is practically my maiden speech, to congratulate two hon. Members on two excellent maiden speeches. First was my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer), who won the seat for the Tory Party at the General Election. His speech was very spirited, lucid, excellently delivered and showed not a trace of nervousness—indeed, showed traces of certainty in his eloquence. I hope that we shall hear more from him. Indeed, I am sure, judging by his delivery, that we will.
There is one point I should add. I had great difficulty in finding out who he was, or his name from The Times guide to M.P.s. The reason is that he has grown something on his face since his photograph was published. If he could make that slight correction, it would assist his colleagues.
The hon. Member for Durham (Mr. Mark Hughes) comes from a county which I have known very well. I once was in a unit of men from Durham at a time when I was a regimental sergeant major, which, as the hon. Gentleman knows, as a lecturer, is a very popular figure in the Army. I did not always understand what some of the people from Durham said but they always produced good soldiers and good footballers. They have always been very consistent in Durham—perhaps a little too consistent—in their political beliefs and I have always said that if England were to give home rule to Scotland, Wales and Durham, we should have a permanent Tory majority for a century in this House.
I congratulate the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) on his speech. I congratulate him


on being lucky in the Ballot. At the same time, I commiserate with him for the amount of time pinched from him by other business. He had a carefully prepared speech and had to reduce it because of the time, which is always difficult for anyone. As a fellow Mancunian, I congratulate him.
The Motion refers to five different matters—indeed, it is almost five Motions. The last four are,
… the introduction of import levies on food, increased charges for public services and the cutting of housing subsidies … and … a value added tax.
I disagree with him on all those but I say right away to the Government that I agree with him absolutely about the Consumer Council. I am going to give my reasons, with illustrations, to the Government to see whether they can detect a flaw in my arguments. I shall speak about it for it is a matter which should really concern the Consumer Council. I will take a bet with anyone, including the Government, that they will not have detected the practice I shall describe.
A free market, which is what we on this side of the House want, will never really be a reality unless the consumer is fully and accurately informed, for otherwise he does not know what he is buying. He can be swindled quite easily, particularly as many more products are coming on to the market. The consumer cannot, in this modern technological age, in which things are complicated and products multiply like rabbits, do the job himself of finding out whether quantities and quality are right. It must be done for him by someone else. He has no time to go into it in depth and detail. He has no expertise. Above all, generally speaking he is not a lawyer—and we in this House know how much we suffer from lawyers. He has not got the money to remedy the position even if he has spotted a fraud.
Even if he could find it out for himself, it would not be any good, because as an individual he is powerless. If an individual writes to a supermarket with a complaint, I do not think that many people take any notice. I believe that the consumers must come together, in the same way as manufacturers and trade unions come together, if they are going to have any practical strength.
I am very sorry to see that the Consumer Council is to be abolished. I am even sorrier because, in 1963, it was the Cabinet of Harold Macmillan, of which I was a member, which introduced it. Now his son, who is to make the reply tonight, is the Minister who is going to take it out again. One can never again say of him, "Like father, like son."

Mr. J. D. Dormand: What the right hon. Gentleman is saying is what the Government have said many times since June—that there is a way in which the consumer can do exactly what he is referring to—that is, that the solution lies in competition. That is what we are told. But does he agree that this can be done and meet the objections which he is so correctly making?

Mr. Marples: I shall not dodge that question. I shall come to it later. I will give the hon. Gentleman an example of how precisely these forces, in my view, do not work.
The Consumer Council did a good job. Government Departments, including the Ministry of Agriculture, have always liked a representative of the Consumer Council to attend meetings to put forward the consumer interest. Representatives of the Consumer Council have also served on Government committees. They were on 88 British Standards committees. No one is representing the consumers now in the consideration of such important things as fire extinguishers, electrical goods and credit, which is very important, as the hon. Member for Wythenshawe said. Who is going to help the consumer now? I do not think that market forces will work unless their goods are properly tested and properly labelled in every possible way and the public knows what it is buying. We need an independent, powerful body to do just that.
I want to give my illustration now of what I have in mind to prove the point I am going to make. It concerns the last thing which the Consumer Council was doing. It started about a year ago. It deals with liquids—not wine, in which I have a vested interest, but another liquid in which I have no interest, so I can therefore speak on it with that impartiality for which I was famous when I was Minister of Transport.
With bottled beer and milk, the Government insist that there should be


prescribed quantities—a pint of milk, or half a pint, for example. The liquid I am going to talk about is sherry—and I repeat that I have no vested interest in it, except for buying and drinking it. The Consumer Council found out a number of odd things. For sherry, for example, there are no prescribed quantities, neither for the label nor for the bottle. The normal amount of sherry that goes into a bottle is considered by the trade to be 26⅔ fluid ounces. This is what they call the "norm". But some bottles contain only 26¼ fluid ounces and others only 26 fluid ounces. It is left to the trade—not as in the case of milk or beer—to play the game and to arrange matters itself.
I want to see whether I can show the House how the trade has operated. I shall quote what was written in the trade newspaper Off Licence News of 24th July of this year. I shall first take the comments of two people who belong to the trade association—the Sherry Shippers Association. Then I will go on to what was said by people bottling and selling the different quantities of sherry. The question of showing the minimum content of the bottle on labels was investigated by the Association towards the end of last year. The idea was dropped because the Association came to the conclusion that it was "not altogether practicable". It is not practicable to show the volume on a label. They must be a brilliant collection of people in the Sherry Shippers Association. That is the first quote.
Then Mr. Tony Humbert, the Chairman of the Association, speaking in July, 1970, said:
I do not feel that this is the time to start putting this kind of information on labels.
If this is not the time, when is the time? If I am buying a bottle of sherry I want to know the quantity inside. I am not saying that it is wrong for different manufacturers to sell different quantities; I am saying that the customer ought to know what quantity he is buying—and he does not.
I now quote what was said by two firms who sell sherry. The first firm sells it in the normal quantity—26⅔ fluid ounces. Its name is Kinloch. The firm's marketing manager told the Off Licence News:

We are in favour of this. I think it is fundamentally wrong, both short-term and long-term, to reduce the volume and we would certainly not consider making a change without first advising our customers and the trade.
There is a man whose firm is selling the correct quantity in its bottles, and he is in favour of labelling.
I now come to a firm selling 26¼ ounces in a bottle—Bulmer, Findlater, Mackie and Todd. That firm says:
Putting the contents on the labels would not present a great problem.
That makes nonsense of the argument of the Sherry Shippers Association, which said that it is "not altogether practicable". The firm goes on to say,
We would not object to doing this but at the same time we are not specifically in favour of it, either.
I wonder why. Could anybody enlighten me why the firm that is putting in less than the normal quantity does not want to show the quantity on the label? I have not been able to discover the reason. Perhaps somebody on the Government Front Bench will be able to tell me.
I have just quoted Mr. Trevor Laws, a marketing director. Nowadays marketing is almost more important than manufacturing. It is becoming one of the most powerful weapons in modern society. I discussed this question with Doctor Schon, who is now broadcasting the 1970 Reith Lectures, when I was with him in America. There is no doubt that conglomerate firms introducing consumer goods make large marketing efforts, and those efforts must be checked by the Consumer Council in order to look after the consumers' interests.
I now come to a firm that puts only 26 ounces in its bottles—Harvey's, which has now been taken over by Allied Brewers. When Harvey's were asked about it a spokesman said that "at the present time" the company had "no plans" to change the volume for their sherries. I am very interested to know why it has no plans. Is it because they put into their bottles more than the norm, less than the norm, or the norm? Another firm is Sandeman's. A couple of months ago it switched over from 26⅔ fluid ounces to 26 fluid ounces. Sandeman's says that
it feels that very few people in the trade would want any change from the present system".


I agree that the people in the trade do not. But I am a consumer, and I do. I telephoned Sandeman's and said, "Are your sherry wines the same as they were when I was in Spain?" The firm said that they were the same. They are the same quality but they did not tell me that they had taken two-thirds of a fluid ounce from each bottle. Then Mr. Tim Sandeman said to the Off Licence News:
I have no doubt myself that this will come one day
—and then comes the punch line, and I should like an answer on the point from my old Prime Minister's son who is going to wind up this debate—
but until it does we aren't going to do anything about it".
Is this the free market working? I am sure that nobody here knew that Sandeman's and Harvey's were selling smaller amounts in their bottles than anybody else. If they did, I am a Dutchman. My wife telephoned Wineways Supermarket, Harrods, Selfridges and the Army and Navy Stores, and on each occasion she was told that all the sherries were the same amount. So the retailer and consumer do not know that they differ. But they should know. There is no excuse for taking in the consumer. If anybody wants to read this publication I shall lay it on the Table. It is a trade newspaper and there has been no conjecturing by me.
Now if we work out the difference between Kinlochs and Harvey's we arrive at some rather shattering figures. If Kinlochs have a certain quantity of wine that will fill one million bottles, they will pay a certain amount of duty. If Harvey's bought the same quantity of wine they would pay the same amount of duty. But they would get 1,024,000 bottles and pay only the same amount of duty as Kinlochs, so I can see why Harvey's have no plans to change their method of selling wine. I am not as bright as I used to be, but at any rate in this respect the penny has dropped.
I want my right hon. Friends to think again. I am sure that they did not know these facts. I do not believe that anybody else in the House knew it. The Consumer Council—and only the Consumer Council—has brought this to light. Not only should labels show the amount in the bottle; that amount should be stamped on the bottle as well. It is in

France. On every bottle sold there the amount is stamped on the bottom.
I want to be short—

Sir G. Nabarro: Hear, hear.

Mr. Marples: Now I am not so sure that I want to be short.
The Prime Minister should think again about this. The Government should remember that the Consumer Council has nearly always behaved sensibly. It backed my right hon. Friend the Prime Minister, when he was President of the Board of Trade, on the abolition of resale price maintenance. A Question was asked by Sir Thomas Moore on 19th March, 1964, and in answering it my right hon. Friend said:
The Consumer Council has also expressed its support for the abolition of resale price maintenance."—[OFFICIAL REPORT, 19th March, 1964; Vol. 891, c. 1580.]
The abolition of resale price maintenance was a rough ride for my right hon. Friend at the Board of Trade. He worked hard, long and against an immense number of adversities. It was a bitter fight. He must have welcomed the Council's support. I should have thought that he owed a debt of gratitude to the Council. I ask the Government to think about this. I ask them not in any hostile way, because I entirely disagree with the rest of the Motion. But if the Government abolish the Consumer Council they must tell me what is to be put in its place.
After what I have said about sherry they cannot say that it is a case of the normal market forces operating. I hope that the Prime Minister will show generosity in this matter, because we know that nothing will take the place of the Council. I am sorry I have kept the House so long and once again I congratulate the two hon. Members who have made brilliant maiden speeches.

5.30 p.m.

Mr. John Mackie: I, too, would like to congratulate the two hon. Members who made their maiden speeches today, both of which were different, and good. We shall enjoy hearing them again. I do not want to be too hypocritical. One generally says that one wishes to hear maiden speakers again, but in 11½ years in the House I have found that everyone is usually dying for


them to sit down, so that they themselves can have a chance.
The right hon. Member for Wallasey (Mr. Marples) said that few people knew about the quantities in bottles. I know about the difference. I have no financial interest in it, but I do not know why he chose sherry, because brandy is much worse. Many bottles contain only 24 fluid oz.—

Mr. Marples: I do not drink such strong liquor as brandy.

Mr. Mackie: I am sorry that the right hon. Gentleman does not enjoy brandy: I can recommend it to him. I have a cousin in the business who has the same name as myself and with whom I am often confused. He was the head of Seager Evans. When I complained that his brandy was dearer, he told me to measure the quantities. There was 26⅔ fl. oz. in his bottles and the quantity went down to 24 or even 23 in others.
This is a wretched and niggardly thrift—if it is thrift—of the Government, to try to save—only £240,000—by doing away with the Consumer Council, which has done so much good. It was the father of the Financial Secretary who brought it in, and he himself will see it out.
I should like to congratulate my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) on putting down this Motion. He has widened it a little, but that gives people a chance to speak.
I want to take the Minister of Agriculture to task for what he said in an earlier intervention. He implied that the levies that we put on were the same as those that he is putting on. There is a world of difference, as he knows. Our levies, working along with minimum import prices, put a floor on the market to protect the taxpayer and let the Chancellor know the most that he would have to pay to support agriculture. His levies are to do a totally different thing—to raise the price of imported food and, with it, home food to the price as near the guarantees as he can.
He knows that this is different, and he knew it during the election, as did the Prime Minister—but nowhere in their election manifesto did they say exactly what they would do. There were vague

references to a different scheme for agriculture, but they did not tell the public that they would deliberately raise food prices in this way.
My hon. Friend the Member for Durham (Dr. Mark Hughes) said that prices were artificially low, but I think he is wrong. If left to themselves, they are the market prices at which the British public could buy in the world's markets. He is right to say that they are artificially high in the Common Market, but they are not artificially low in the world's markets.
The hon. Member for Worcestershire, South (Sir G. Nabarro) must be behind in his reading if he thinks that S.E.T. put up the price of food. I have the Reddaway Report here. I would refer him to Table 22 and pages 210 and 211, which show that that distinguished body investigated this matter, and that the hon. Gentleman is quite wrong—

Sir G. Nabarro: rose—

Mr. Mackie: The hon. Gentleman cannot possibly add anything to what I am saying. He is wrong to say that S.E.T. was one of the main reasons for the rise in food prices.

Sir G. Nabarro: Of course I will answer the hon. Gentleman at once. He is entirely incorrect in suggesting that I am wrong in the matter. Every distributor of food and all his employees attract selective employment tax. Only the consumer can ultimately pay that tax. Indeed, the consumer pays all of it, which puts up the price of food by approximately 10 per cent. over the counter.

Mr. Mackie: That is exactly what I was saying—that the hon. Gentleman has not read the Report. At the top of page 211, that point is completely replied to. I do not want to bore the House with it, but I ask the hon. Member, before he intervenes again, to get himself up on his homework, as he obviously has not done today.

Mr. Deputy Speaker (Miss Harvie Anderson): Before I call the next speaker, may I draw attention to the fact that this debate has a time limit? If speeches are reasonably short, it may still be possible to fit in more speakers than appears probable at the moment.

5.36 p.m.

Mr. Neil Marten: In that case, Mr. Deputy-Speaker, I will cut short the nice remarks that I had intended to make about previous speakers and get straight on to the Motion, which refers to our "unconcern" about rising prices. I very much object to that. We on this side are only human, like hon. Members opposite, and we are deeply concerned about this matter. I am sure that my right hon. Friends are as concerned as is the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris).
But we should ask ourselves what has caused the rise in prices. Basically, it has been the compulsory Prices and Incomes policy brought in by the previous Administration. That policy was begun by the Declaration of Intent, followed by seven White Papers, three Acts of Parliament, numerous statutory Orders, and over 150 Reports from the Prices and Incomes Board—and at the end of the day, we had the worst inflation for 20 years.
This is something of which we warned the Labour Party when they brought in this legislation—that when they took away the restrictions, all the pent-up wage demands would flow over the dam. That is precisely what we are seeing today and that, more than anything else, has caused the present rise in prices.
How did this happen? The policy was effectively ended in the autumn of 1969, when the election was on the horizon. I believe that the Government of the day let the wages rip in the hope that, by the time the election arrived, more money would be in the pockets of the voters but inflation would not have caught up. Of course, the electorate did not fall for that one.
The second reason was the one which has been discussed in the last week or two—the question of the money supply, which was planned at a certain level and, again, before the election was let rip. I will not go further into that, because there are various arguments about how much and at what point the money supply was expanded. But these two matters, more than any others, have caused the inflation which the Motion criticises.
In 1951, in the last year of the Labour Administration, inflation was 12 per cent.,

and after two years of Conservative Government, with the bonfire of controls and so on, it was down to 2½ per cent. So that is the sort of time scale in which we have to deal with inflation. This cannot be done in a matter of months, as the Motion imagines; it will take up to two years to get the inflation down to a reasonable level.
I believe that employers and employees must in future take a rational and longterm view of their true interests in demanding and settling wage claims. If they do not, as the Prime Minister has said, they will be confronted with the consequences of their action. I hope that corporations and individuals will exercise their responsibility before either or both kills the goose which lays their golden eggs.
I was very interested to hear what was said about import levies on food by the hon. Member for Durham (Mr. Mark Hughes) who, I am sorry to see, has now departed from the Chamber. He said that our policies would make food prices artificially high, but the fact is that the previous policies, from which we are changing, kept our food prices artificially low. It is important to remember that. With our system of levies, the increase in food prices will be 2 per cent. a year or 2 per cent. overall—I am not sure which—but it will be accompanied by tax reductions. I know that those reductions do not affect everyone, but the less-well-off will be compensated by various allowances.
If we go into the Common Market—and I do not apologise for referring to this aspect, as it is relevant to the Motion—food prices will go up not by 2 per cent. or 4 per cent., but by up to 25 per cent. We are told by the European movement that we would all be getting £7 a week more in our Christmas pay packet if we were now in the Common Market. That is a curious statement. If food abroad is so cheap why do European housewives cross by boat to Folkestone and Dover to do their shopping and still find it cheaper here, even paying the return boat fare, than it is to buy in their own Common Market countries?
I put down a Parliamentary Question to my right hon. Friend the Secretary of State for Employment—not to the Foreign


Office, whose Answers on this matter are sometimes rather dubious—asking
… what factors he takes into account when calculating real wages in Great Britain in comparison with real wages in foreign countries; and on what basis a fair comparison can be made.
The Answer I received was:
International comparison of real wages is not practical."—[OFFICIAL REPORT, 19th November, 1970; Vol. 806, c. 468.]
Yet still the European movement pumps out this propaganda about our being £7 a week better off if we go into Europe. I hope that all that propaganda will be regarded with the same suspicion as was revealed by that Answer.
I refer to sugar because my right hon. Friend the Minister of Agriculture is with us. If we go into the Common Market the price of sugar will go up from 8d. to ls. Id. a lb. We get it for 8d. a lb. because of the Commonwealth Sugar Agreement, under which we import annually about two million tons of sugar at about £45 a ton. That gives us stability of supplies and prices and gives developing countries stability of income and production.
Sugar is a very sensitive world commodity, and that is why we must take such great care of it in our negotiations with the Common Market. If we are to join the Common Market, satisfactory arrangements about sugar must be made. I say "If we are to join", because I do not believe that we shall; the country does not want it, and I hope that we do not. My information is—and if it is wrong I hope that the Minister will take the opportunity to make a correction—that in the Common Market negotiations we have put in a bid for sugar quotas to remain at their existing level for a number of years.
I understand that there is some talk that during that transitional period Australia may well be phased out of the Commonwealth Sugar Agreement. On the face of it, that may seem a logical and easy matter for a developed country like Australia, but it means dumping 335,000 tons of Commonwealth Sugar Agreement sugar on the world market. That would very much upset the International Sugar Agreement, which took a very long time, with U.N.C.T.A.D.'s help, to create. This phasing out may not

seem to be so much an important matter to Australia as to the other sugar-producing countries for whom we have such a great responsibility.
For the reasons I have given I will, should there be a vote, oppose the Motion.

5.45 p.m.

Mr. Arthur Davidson: I had a feeling that references to the Common Market might come into the speech of the hon. Member for Banbury (Mr. Marten), though I accept that it is related to the Motion, which is drafted widely. I very much enjoyed the speech of the right hon. Member for Wallasey (Mr. Marples). Why he should say that he is not as bright as he used to be I do not know. If I may say so, he is very bright indeed, and I agree with everything he said. I want to limit my remarks to the same point that he made, which is the winding up of the Consumer Council.
I ask the Government the simple question: why have they done it? Questions have been asked of the Prime Minister, but he has given no explanation of a decision which has been criticised by almost every organ of opinion. At first I thought that perhaps the Government think that the Consumer Council has not done a good job—that it is ineffective or inefficient, or the like—but that cannot be the case, because in the Conservative Campaign Guide at the last General Election we read:
In 1963 the Conservative Government set up the Consumer Council which has since proved to be a powerful and influential spokesman for the interests of the consumer.
That statement was relied on during the last election campaign when the present Government and their supporters were not indifferent, at any rate, to the interests of the consumer.
Why should a body which only a few months ago was said to be powerful and influential now apparently be so powerless and useless as to need abolition? The Government have not explained. It cannot be that they did not think at one stage that it was a worth-while organisation because, as the right hon. Member for Wallasey said, a Conservative Government set it up. The Consumer Council made some very useful reports during the lifetime of Conservative Governments, and the present Prime Minister paid


tribute to the Council when he very courageously pushed through his policy of abolishing retail price maintenance.
Can it be that the Council costs too much? The cost is only about £240,000 a year compared with the £40 million to £50 million which only last week or the week before the Government announced they would pay to Rolls-Royce. It cannot be the cost. If I have any criticism to make of my right hon. and hon. Friends, it is that we did not give enough money to the Consumer Council when we were the Government and could have done so.

Mr. Marples: And, what is more, did not themselves, in Government Departments, give it enough support.

Mr. Davidson: The right hon. Gentleman is probably correct in saying that.
Why did the Government abolish the Consumer Council? The Prime Minister says in his very evasive replies that there is some other body that can take over the work or is itself carrying out that work, but that is not the case. The only other body is the Consumers Association, on whose council I serve with the hon. Member for Beckenham (Mr. Goodhart). That body has stated publicly that it cannot carry out the duties and work of of the Consumer Council. It just does not have the funds and the facilities to do so. That cannot be the reason why the Consumer Council has been abolished; it cannot be said that there is some other body able to carry out the work.
Even in the context of the Government's declared philosophy, the abolition of the Consumer Council does not make sense. In his mini-budget the Chancellor announced the phasing out of the Council, at the same time enunciating certain principles which were to be the guidelines of Conservative policy, of Government philosophy. The first—and it is an unexceptionable principle, but not very original—was that individual citizens should be able to keep more of the money they earn. I agree.
Everyone agrees with that, but it is exactly in that direction that the Council was able to help. It ensured that by careful and selective buying the citizen did not waste his money. To give one example of the sort of contribution the

Council has made, I would mention the Teltag informative labelling scheme. Why should a person be considered to have sufficient knowledge to be able to judge, off his own bat, whether a carpet is of good, bad or indifferent quality? How is he to know whether it will live up to the use to which he intends to put it? Now that it is labelled "hard domestic use" or "soft domestic use" he knows very much better the sort of purpose to which he can put the carpet.

Sir G. Nabarro: The hon. Gentleman must be fair. I was in and around Kidderminster for 19 years and I know beyond peradventure that the labelling of carpets as to content, quality and various other matters was nothing whatever to do with the Consumer Council. It was a voluntary act carried through by a consortium of the principal carpet manufacturers, for consumer protection interests.

Mr. Davidson: After a great deal of pressure from the Consumer Council—

Sir G. Nabarro: None whatever.

Mr. Davidson: The second principle enunciated by the Chancellor, again unexceptionable, was that the individual should have greater freedom in how he spends or saves his income. I agree. Greater freedom means that there should not be restraints upon his freedom of choice, placed there by commercial organisations who are deliberately not supplying certain things to him. The best example I can give of this is the three-star petrol. For a long time people were not able to get three-star petrol. Again, it was only as a result of intensive campaigning by the Consumer Council that three-star petrol was introduced. It has been of great benefit to every motorist, including those in Kidderminster.
There was criticism of the legal profession of which I am a member. I am sure that the hon. Gentleman who made that criticism did not have me in mind. I would like to mention one other report by the Consumer Council, published recently, which has a bearing on this, and that is the report on the need for a small claims court. Every hon. Member knows that at some stage someone comes to him and says, "The central heating has been installed badly", or "My car has been repaired inefficiently. What can I do?".


We all have to say, "You have your legal remedies but if you go to court it will cost you far too much. I would not recommend you to do it." The consumer-constituent goes away feeling that the law is inadequate. He feels indignant and if we feel strongly about British justice it is something we should take seriously.
If the Government believe that competition will protect the consumer that is one thing. Do they not also feel that competition brings with it certain excesses? The public needs to be protected from sharp salesmanship, shoddy goods, and that sort of thing. There is no other body apart from the Consumer Council with the funds, resources and trained staff to do this work. I pay tribute to the great work done by Dame Elizabeth Ackroyd. What will happen to that trained staff? I hope that a more satisfactory answer will be given by the Government today as to why they have taken this deplorable step.

5.55 p.m.

Mr. Peter Mills: I must declare an interest at once because I am a consumer. I am also a farmer. I produce food and help process it. I am therefore actively concerned with food and food prices. I am sorry that the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) is not in his seat, because I wanted to make a few comments about him. He has a nerve to bring forward this debate today! How the Opposition can criticise this Government for increasing food prices when we think of what has happened in the last six years is amazing. Talk about the kettle calling the pot black!
Hon. Members opposite have forgotten. Do we have to spell out again the reasons why food prices have increased? Wage demands have been rising. Have they forgotten devaluation and what that has done to the price, of imported grains, particularly hard wheat, mutton and beef and a whole range of fruit and other products? All have been seriously affected. The Opposition seem to forget this. Have they forgotten taxation, particularly food tax increases? Every lorry that transports food throughout the country is costing more, and that is a direct result of the Socialist Government?
The hon. Member for Wythenshawe said that S.E.T. had had no effect. He ought to ask the food distributors. I asked them about this before the election and they told me that £85 million a year had been added to costs as a result of it. Have hon. Membes opposite fogotten that most expensive piece of legislation, the Transport Act? If ever a Measure has produced expensive food, it is that. We have only to look at what happens when a person has to carry meat from Cornwall and Devon to London to see how it is working. The ridiculous situation exists at the moment whereby a person has to have two drivers, one following behind the lorry in a car. Once the first lorry driver's time is up, the other driver in the car has to take over. We have present the hon. Member for Glasgow, Woodside (Mr. Carmichael) who helped form and devise that Measure.
There has not been a word about the effect of their legislation over the past six years on the price of food. Certainly the consumer needs protecting—but from Socialist legislation which increases food prices.
The hon. Member for Wythenshawe complained about our new policy of import control and levies. We need to return to basic thinking and decide whether we want to grow more food in Britain. I do. It is in the interests of the consumer and of our balance of payments that we should do so. It is ridiculous that at this time we should be importing Mexican carrots paid for with our precious dollars when we have the finest carrots in the world.
I sometimes think that our importers and the Board of Trade are not interested in import substitution. The report of the Agricultural Economic Council suggested that the annual gross output would be increased by £345 million—17 per cent.—with a net import saving of £220 million. This would be in the interests of the consumer and of the nation.
This was not easy to achieve under the Socialist Administration because the old system of deficiency payments did not always work. The more that was produced the more the end price was diluted. Treasury control and standard quantities work against the expansion of home agriculture.
If this very desirable increase in home agriculture is to be secured it must be done by import control and levies. Although the Common Market agricultural policy can be condemned as regards its internal working, in the matter of import control and levies and preventing dumping of food in the Community it works very well. I speak from experience, because I sometimes try to export cattle and meat to the Common Market.
If expansion of home agriculture is agreed to be desirable, Exchequer financing of agriculture must be bypassed. This is why it is necessary to introduce a policy of import control and levies. It will slightly increase the price of food—by 2 per cent. a year, or 5 per cent. or 6 per cent. over the transitional period.
In their six years in power, the Socialists increased the cost of food and of living by 22 per cent., without any advantages on their side. They did not increase home production, nor did they stop food imports. Yet they have the nerve to criticise us and our import policy.
Ours is a package deal. It will help to reduce taxation. It will save the Treasury at least £250 million. It will help with our balance of payments. To be set against the slight increase in food prices are the real advantages which will accrue from the new policy, whereas under the Socialists we had only price increases and no advantages.
The consumer benefits from a policy of expanding the production of homegrown food. Our products are first class. I defy anybody to show that Britain cannot produce the very best food cheaper than most foreign countries. It is dangerous to be dependent on foreign produce alone. A slight reduction in the maize harvest in America this year—14 per cent. or 15 per cent.—threw the whole cereal world into confusion and caused prices greatly to increase. If we produced more of our own cereals we should not be at the mercy of foreign countries.
The hon. Member for Wythenshawe was right to table the Motion so that we could discuss the matter, but he has not a leg to stand on. Under the Socialists food prices and the cost of living increased alarmingly. Our package deal will not only produce a healthy agricultural industry; it will help with the balance of

payments and save £250 million a year, thus allowing the Treasury to reduce taxation and help those in very real need. I for one would like to throw the Motion right out.

6.5 p.m.

Mr. John Smith: One of the better features of community life in these islands over the last 10 years has been the growth of interest in the consumer. This has arisen because of an appreciation amongst the public and amongst people in all political parties that, with the expensive advertising and the marketing techniques deployed nowadays by large industrial enterprises, the human needs of the consumer must be recognised and consumers need to be protected against modern methods of salesmanship.
Two developments have typified this increasing concern on the part of the public. One has been the growth of the Consumers' Association, which has done a splendid job in bringing to the attention of the public the relative merits and defects of different articles offered for sale. The other has undoubtedly been the Government sponsored Consumer Council. It is to the decision to abolish the Consumer Council that I shall address a few remarks.
The question has often been asked by hon. Members on both sides as to why the Government decided to withdraw the Council's grant. It could hardly be said that it was reasons of financial necessity that impelled this decision, because the sum involved is fairly trivial.
It can hardly be said that the Consumer Council did not perform a useful function. Hon. Members will be familiar with a number of the things that the Consumer Council has promoted over the last few years. Reference has been made to the telltag scheme, whereby retailers were persuaded to put labels on their goods telling the public what they were buying. This was a wholly desirable innovation. It is only a matter of regret that manufacturers and retailers had to be persuaded to take such action.
Another of the things which the Council did which I thought was particularly commendable was to intervene in the operations of people who organise tours abroad—travel operators. The Council persuaded 22 leading travel operators to


introduce a voluntary bonding scheme whereby assistance could be given to passengers who went overseas and who were stranded by some mix-up in the arrangements. The Council persuaded Clarksons, a major tour operator, to enter into an arbitration scheme whereby complaints could be adjudicated by the Council. With the abolition of the Council, the arbiter has been removed.
In the light of these things it can hardly be said that the Council was not doing a useful job. Indeed, it was doing precisely what the Conservative campaign guide said that it was doing.
One other feature in respect of which the Consumer Council requires commendation is the pressure which it exerted over a number of years to bring about the amendment of the law, and in particular of the Sale of Goods Act, to abolish the exclusion clauses in contracts under which a consumer could be deprived of his rights under the Sale of Goods Act. As a result of pressure by the Council amongst others, the English and Scottish Law Commissions in 1969 produced a report recommending a change in the law.
These changes in the law would be extremely important for the consumer. I hope that the recommendations of these joint Law Commissions will be implemented as soon as possible. We need now a new Consumers Act to define the rights and responsibilities of consumers and manufacturers in a modern context. The law on this subject goes back to the Sale of Goods Act, 1893, and was framed in a society quite different from that in which we live. It is high time that Parliament took the necessary time and trouble to amend the law. If a Private Member's Bill emerges on this subject, I hope that the Government will look with favour at passing a new Consumers Act bringing up to date the law as it affects the consumer.
Many good ideas for protecting the consumer no longer have the pressure behind them which the Consumer Council was able to exert. The Council was able to influence Government Departments, to give informed comment to the Press, and to stimulate public discussion in an intelligent and responsible way. All that will go by the board as a result of the Government's decision. As I

understand it, they say that the job can be done by others. But that is not so, because the Consumers' Association performs a different function. Apart from anything else, it is a private organisation, responsible in the first instance to the members who subscribe towards it. The information which it provides is given to its members. It does a thoroughly good job, but it does not reach a very wide public. Only those with the initiative to have joined the Association have the advantage from its reports.
The millions of consumers who do not have the initiative and interest to join a body like the Consumers' Association were well looked after by the Consumer Council as regards safety standards, proper sales techniques and the protection of a sometimes gullible public from the artful arts of salesmanship. What will happen now that the Consumer Council has been removed? All that pressure, information and assistance will be removed and nothing will be put in its place.
I should have thought that the Conservative Party would have favoured the work of the Consumer Council. We are often given homilies by them about the virtues of self-help and competition. There can hardly be any competition unless there is a strong discriminating public which is well informed about the choice it has to make and able to make a real choice between various articles offered for sale. We surely cannot have proper competition when the public is not informed about the respective merits of articles offered for sale.
The right hon. Member for Wallasey (Mr. Marples) gave some good examples in his speech of how the public are just unable to obtain information upon which they can base a reasoned choice. I should have thought that if the Conservative Party believed in competition as something that should work, rather than just something to talk about, they would support the Consumer Council and make sure that the public had important information upon which they could base their choice.
Shortly after the decision was made, I happened to speak to a large retailer in the City of Glasgow. He told me that he was shocked at the decision to abolish the Consumer Council because, as an important retailer, he valued the work it had done and he had nothing to fear from


a more discriminating and critical public. Indeed, he thought he would be able to sell more goods if the advantages of his trading were demonstrated to the public. We speak for more than just this side of the House when we ask the Government to reconsider their decision. Apart from strengthening the interests of the consumer in this country, the Government might bear in mind that if they decided to reinstate the grant to the Consumer Council, Conservative candidates at the next election would be able to rely, for once, on the campaign guide.

6.15 p.m.

Sir Gerald Nabarro: Anyone listening to speeches of hon. Members opposite would suppose that we are about to assassinate consumer protection. We are doing nothing of the kind. All we are doing is murdering the Consumer Council. I am delighted to be a participant in that murder.
Fifteen years ago the noble Lady the Baroness Burton of Coventry sat on the benches opposite as the Member for Coventry, South. She was the progenitor in this House of consumer protection measures. I dubbed her "Meddlesome Mattie". She would interfere with every process of retail trade.
It is no part of the Government's duty to interfere or intervene in retail trade save only by Statutes passed in the House, such as the Companies Act, the Monopolies Act and the Trade Descriptions Act. Had I time, I could mention many more Measures of that kind. All of them operate very satisfactorily in the interests of consumer protection.
Take, for example, the racket of selling second-hand motor cars with the recorded mileages deliberately fiddled with, adjusted and reduced by certain dishonest dealers to attract a buyer at the highest price. A recent prosecution in the North Midlands has echoed right through the trade. Under the Trade Descriptions Act the court had no difficulty in reaching its verdict and fining the offender very heavily. That is the kind of consumer protection which the House should support. Notwithstanding the distinction with which Dame Elizabeth Ackroyd has presided over the Consumer Council for so many years, we should not perpetuate an organisation which is a hybrid and which

serves very little practical purpose among the general body of consumers.
Consumer protection organisations may be formed by retail trading interests and manufacturers combined. I am very much in favour of that, so long as the Government are not asked to contribute the taxpayers' money for the purpose, which is a misplaced application of public funds. It comes into exactly the same category as the Government's refusal to support financially the Mersey Docks and Harbour Board, or the refusal to lend money to extend the tube from Hounslow West to Heathrow Airport. These are not functions which the Government should finance. They are functions which should be supported financially by the money market or by private manufacturing interests or retail interests, as the case may be. In my judgment, they are not a call on taxpayers' funds.
I turn to the long controversy in this debate about taxation and the part that selective employment tax and other similar taxes play in consumer prices. I believe hon. Gentlemen opposite are naïve; not knavish or dishonest. The hon. Member for Enfield, East (Mr. Mackie) quoted from Government reports that the incidence of selective employment tax does not influence the retail price of goods, including food. What drivelling rot!
Let me give the House the figures. This year the retained selective employment tax amounts to approximately £600 million. This year the amount of money collected from purchase tax amounts to approximately £1,200 million. The whole of the £600 million from selective employment tax and the £1,200 million from purchase tax, a total of £1,800 million, goes on consumers' prices paid over the counter. It cannot be absorbed in any other way. It is all charged to the consumer. I cannot go into the intricacies of the report quoted by the hon. Member for Enfield, East, but I disabuse him at once. The whole of the £1,800 million is absorbed in retail prices.
I want unashamedly the replacement of selective employment tax and purchase tax by a value added tax, for a whole variety of reasons not connected with the European Economic Community. I do not believe in the French system of


value-added tax, and when we have the next Budget I shall enunciate exactly the system which we should embrace—

Mr. Arthur Lewis: When are you introducing your Budget, Gerald?

Sir G. Nabarro: I wish the hon. Member for West Ham, North (Mr. Arthur Lewis) would not shout comments like that. It is a matter for my right hon. Friend the Prime Minister—and I am not without hopes in that regard. The fact remains that for reasons of fiscal equity, of simplicity and of hedges against inflation, a value-added tax is infinitely preferable to the present system with a combination of selective employment tax collecting £600 million net and purchase tax collecting £1,200 million net.

Mr. James Wellbeloved: rose—

Sir G. Nabarro: The reason why I do not give way to the hon. Gentleman is that I have promised to sit down at 6.22 p.m. in order to allow his own Front Bench spokesman to wind up the debate.
I will deal comprehensively on future occasions with all these matters of indirect taxation—[Interruption.] Perhaps "exhaustively" would be a better word—and logically and objectively. All these would be manifestly in the good interests of the consuming public.

6.22 p.m.

Mr. George Darling: I always admire the speeches of the hon. Member for Worcestershire, South (Sir G. Nabarro), especially when they are short and crisp. However, perhaps I might point out that he has been the only speaker in the debate to call upon his right hon. Friend the Prime Minister to sack the Chancellor of the Exchequer. No doubt that is because the hon. Gentleman wishes his policies to be accepted by the Government. I do not know what the Government's view will be about a value added tax. I had not intended to mention it, because I, too, want to keep my speech short so as to allow the Chief Secretary plenty of time in which to reply to the points which have been raised.
We have listened to two excellent maiden speeches, the first of them coming

from the hon. Member for Lewisham, West (Mr. Selwyn Gummer), who asked a very pertinent question about how best we should protect the consumer. At the end of his very interesting speech, I felt like entering into a debate with him about it. I profoundly disagreed with most of what he said, but it was an extremely constructive speech, and we all look forward to the controversial speeches that he will make in the future.
My hon. Friend the Member for Durham (Mr. Mark Hughes) is the successor to an almost silent hon. Member who was a Whip and could not take part in our debates to any great extent. None the less he was a well respected Member of this House. I was pleased to hear my hon. Friend's references to the mining villages in and around his constituency and the living conditions of people who now have to seek work outside coal mining because mines have been abandoned. It was an eloquent and extremely pertinent speech which went to the core of the Motion that we are discussing.
I want to congratulate my hon. Friend the Member for Manchester, Wythenshaw (Mr. Alfred Morris) on his choice of subject, though some hon. Members would perhaps have worded the Motion slightly differently. There is bound to be a difference of opinion on the last six words which refer to a value-added tax. However, the upward trend in living costs is undeniable. I take issue with the hon. Member for Torrington (Mr. Peter Mills) about when the upward trend began and what are the reasons behind the inflation which we see not only here but also in many other Western countries.
As I have said, the upward trend in living costs is undeniable, and I am sure that it is just as disturbing to hon. Members opposite as it is to my right hon. and hon. Friends. If the last six words of the Motion were omitted and instead of saying
That this House deplores the failure of Her Majesty's Government …",
it said
That this House regrets the failure of Her Majesty's Government …
and did something about the word "unconcern", hon. Members opposite would find it difficult to oppose. Anyhow, I support it as it is worded.
It is right to criticise the Government for their failure to protect consumers from


rising prices. They followed their leader, and the notes from the Conservative Central Office, during the election campaign in making categorical promises to check the upward trend and to keep prices steady "at a stroke". Since then, we have had premises to keep prices and charges in the public sector under a very close and strict review.
I remember the Secretary of State for Trade and Industry making this pledge a few weeks ago, and it seemed to me to be an encouraging change of policy. Apparently we were not going for a complete market economy with no Government interference, at least in the public sector. In view of that, I tabled a Question to the Secretary of State in the very words that he had used in reply to the Question which had encouraged my hopes. I asked whether he would
seek powers to enable him to scrutinise all proposed price increases in the public sector and allow them only when there is a proven case for them."—[OFFICIAL REPORT, 16th November, 1970; Vol. 806, c. 325.]
It is not much use Ministers scrutinising proposed increases unless they intend to do something about the increases, and I wanted to help the Secretary of State to carry out his pledge. On 16th November, I got a very dusty answer. There was no ambiguity about it. It was a plain "No". Apparently the Government will look at increased prices and charges in the public sector and do precisely nothing about them. So we have another pledge discarded without any expression of regret or apology.
I will not go into all the matters which have been discussed in the debate so far. Instead, I will draw attention to what I consider to be the likely effects of Government policy on the living standards of families with low incomes. I am quite sure that my hon. Friends have understated the probable effects. We begin by following the Government's point of view, which is that wage and salary earners are now much better off than when we started to build up the Welfare State. That view has been repeated by hon. Gentlemen opposite today. They say that people can now afford to do without subsidies and welfare services and are able to meet the economic costs and prices which have been or are likely to be determined by competitive forces in a free market. I think that that is the Government's argument.
It requires a great deal more examination, before we can accept it, and we have to ask a few questions. First, what is a reasonable minimum wage to ensure that our work people can meet increased charges, can stand on their own feet and can manage without any kind of subsidy? It is only when one establishes what is a reasonable minimum wage that one begins to understand the size of the problems in terms of social welfare that we may have to face.
We could, I suppose, take the average wage which is given in the Department of Employment Survey, the most recent one being for April of this year. The average wage for all wage-earners, in the wide sample that is taken, is about £25 a week for men for a 46-hour week, before deductions and insurance. Their take-home pay, therefore, is less than that figure. Is that an acceptable minimum wage in present circumstances? Is that the kind of wage that will keep a man, his wife and two or three children in decent circumstances without any help from social welfare and enable the family, as the Government say, to stand on their own feet?
I have gone on to make some further inquiries about this. It is no use talking about an average wage without reference to the number of people who do not get the average wage. If one looks carefully at the information given in the Department of Employment's Gazette one sees that about half the wage earners receive less than the average. [Interruption.] If hon. Members want a lesson in statistics, they can have it. One could have more than half the people below the average or more than half above it and still arrive at the same average. It depends upon the spread of incomes. The spread of incomes is indicated in the Survey.
When half the male workpeople are getting less than what I consider to be a decent standard of living, they cannot be expected to face up to the Government's policies without hardship and without a great deal of complaint—and complaint will come—in demands for higher wages.
Finally, I want to comment on the abrupt closing down of the Consumer Council. To my mind, this was a mean and unworthy decision. I am sorry that the hon. Member for Worcestershire, South has disappeared, because I disagree strongly with the views which he


expressed about the Consumer Council, which showed that he did not know how it was constructed, what were its terms of reference and what it has achieved. This was an unworthy decision by the Government, and the manner in which it was announced—without warning and without discussion or consultation with the Council—was disgraceful.
I hope that when the Chief Secretary intervenes, he will make good the Government's regrettable omission to pay a tribute to the extremely useful work which has been accomplished by the Consumer Council. For my part, I want here to pay a tribute to all who have served on the Consumer Council, and in particular to Dame Elizabeth Ackroyd, who has been its director from the beginning.
I have with me, and I could quote, many statements which have been made by appropriate people who are involved in trade and industry about the good work which has been done by the Council, but I should like to say this on a personal note. If the Chief Secretary or his officials have looked up the discussions that we had when the Consumer Council was established, he will have seen that I was somewhat sceptical of the Council's constitution and its terms of reference. I wanted something much stronger.
I was wrong, however—I freely admit this—and the Molony Committee was right when it recommended that a Consumer Council should be set up but that the Council should be limited to collecting and disseminating information, giving advice to Government Departments and generally trying to make a better climate of opinion in our trading services, a point which was made by the right hon. Member for Wallasey (Mr. Marples), and that law enforcement and administration of all the legislation about trading standards should be left to local authorities. I agree there with the hon. Member for Worcestershire, South.
The Consumer Council has done well and at very little cost. The £½ million has helped the public to get value for money because of the educative work of the Consumer Council alone. That cost is very small indeed. In fact, the public has got more out of the work of the Consumer Council than the cost.
I suppose that it is now impossible to plead with the Government to revoke this regrettable decision, although the Government would gain in public esteem if they would occasionally admit that they can make a mistake rather than always claiming to be omnipotent.
If, however, the Consumer Council is to go, I sincerely hope that the Government will consider the administration of what, in shorthand and for convenience sake, I can call our trading standards service. The Chief Secretary will understand what I mean. I refer to the administration of the necessary legislation that we have had to pass. It is not only for the protection of consumers; we also have to bear in mind that the vast majority of manufacturers and traders are perfectly honest and value their good will. What we are really getting at are the shysters on the fringe and also certain trading practices which may grow up and which should be checked even among reputable traders. This is where the trading standards service is needed.
I sincerely hope that if the Consumer Council has to go, if the Government will not admit that they have made a mistake, they will consider again the administration of this trading standards service, so that we can go on guaranteeing that the people continue to get value for money.

6.36 p.m.

The Chief Secretary to the Treasury (Mr. Maurice Macmillan): The Motion which is before the House is very comprehensive. As my right hon. Friend the Member for Wallasey (Mr. Marples) said, it is a real portmanteau. It ends up with a request to the Government about a value-added tax, a method of taxation which is held by the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris), who moved the Motion, in all the dislike and suspicion with which a traditional executioner must have viewed the rather more impersonal guillotine.
That plea in the Motion is tacked on to a statement, set out in some detail, of the points which are now the main worries of most of our people and represent a very great threat to our whole economy. Tacked on to that again is a selective list of some of the Government's policies, coupled together in a way


which seeks to pretend that one is the cause of the other.
As a result, the debate has followed a predictable pattern, relieved by two maiden speeches, to which I gladly add my tribute. One was by the hon. Member for Durham (Mr. Mark Hughes). I should like to endorse his view of his constituents, who many years ago were very kind to me, doing everything they could except elect me as Member for Seaham Harbour, which was hardly to be expected. The hon. Member spoke with the eloquence, erudition and elegance that one has come to expect from graduates of his college.
The hon. Member for Durham paid a graceful tribute to his fellow maiden speaker, my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer). He, I thought, was the first person in the debate—and almost, in some ways, the only one—to deal more deeply with the problems, turning from the symptoms to the disease itself, trying to answer some of the questions which the hon. Member for Wythenshawe had begged and bringing in wider considerations of policy. I hope he will forgive me if I say that if that was uncontroversial, I look forward to hearing him when he is really going it.
Despite that relief, however, we have had a rehash of the previous two-day debate plus a large number of speeches about the Consumer Council. Apart from this, on the general line of the Opposition's attack and on the Motion itself, the Opposition's speeches have ignored the past in a sort of bland assumption that all our present problems stem from events and policies which have occurred since 18th June.
I hope that the House will allow me to set our discussions briefly in their proper context. In so doing, I hope to expose the gross oversimplification of the right hon. Member for Sheffield, Hillsborough (Mr. Darling). Perhaps I may mention now what, I am sure, was an unintentional mistake when the right hon. Gentleman referred to my right hon. Friend the Prime Minister and the Government looking at public sector prices. They did not say that they would do nothing. They said that they would take steps to prevent unjustified rises in price, and, indeed, they have taken such steps.

Mr. Darling: I am sorry to intrude, but the reply I was given by the Secretary of State for Trade and Industry said that the Government would not seek any powers to control or prevent the rise of prices in the public sector.

Mr. Macmillan: That is perfectly correct, nor is it incompatible with what I said. Prices indeed have been kept lower than they would otherwise have been without the use of powers which we are not seeking.
I think it is perhaps not surprising that the right hon. Gentleman the Member for Hillsborough would have liked to have altered the terms of his hon. Friend's Motion. It really is extraordinary that the hon. Gentleman should have forgotten so much. He referred to charges in the public services, charges which were being imposed by this Government. Has he forgotten the increases which the last Administration made—for school meals between 1968 and 1970, and school milk, in prescription charges and other health charges? The hon. Gentleman did, I think I am right in recollecting, oppose those, and he has a clearer conscience than many of his colleagues sitting with him.

Mr. Alfred Morris: My right hon. Friend did not say he would have liked to have reworded the Motion. Nor is it enough for the hon. Gentleman to try to take attention away from the enormous new burdens which are being placed on the users of the public services, particularly housewives.

Mr. Macmillan: These questions were dealt with by my hon. Friends on this side, and when the hon. Gentleman was not in the Chamber, and it is no good hon. and right hon. Gentlemen opposite seeking to evade the issue. This is part of the context of what we are now debating. This is the background against which the policies which we are developing have to be set. After all, it was the previous Administration which made the real cuts in the real programmes—in July, 1965, July, 1966 and January, 1968—and they increased taxation more than any other Government had done since the war.
The hon. Gentleman referred to the unconcern of the Government over rising prices. How much concern did the previous Government show in their term of


office—when prices rose 6s. in the pound—accelerating; when they were responsible for the wages explosion which is still causing effects now? In December, 1969, the norm of 2½ per cent. to 4½ per cent. was set. In the Spring of 1970, and, as my hon. Friend the Member for Banbury (Mr. Marten) pointed out, wages were let rip up to the time of the General Election and their average increase was 10 per cent. It was the previous Administration which jacked up inflation in other ways. In April last the expansion of domestic credit was set at a limit of £900 million a year, but when we got in we found that in the first quarter the expansion had been some £700 million.
Of course we are concerned, and we made it clear at the election. We said in our manifesto that inflation was
the major cause of social injustice always hitting hardest at the weakest and poorest members of the community".
That was how we described the inflation which right hon. and hon. Gentlemen opposite left behind. And we warned:
Britain now faces the worst inflation for 20 years. The Labour Government's policies have unleashed forces which no Government could hope to reverse overnight.
As I say, I must exempt the hon. Member for Wythenshawe from some of the worst inconsistencies, and he has been a consistent opponent of value added tax, too, in or out of the Common Market context.
I will turn now to this question. In our manifesto we said:
We will abolish selective employment tax as part of a wider reform of indirect taxation possibly involving the replacement of purchase tax by a value added tax.

Sir G. Nabarro: That is what I said.

Mr. Macmillan: Incidentally, I think I must put the House straight on this, and the hon. Gentleman would, I am sure, agree with me, that the form of value added tax he described is one form: there are in fact other variations which we need not go into. I would remind him and the House that value added tax is not the only tax which falls ultimately on the consumer. So does purchase tax, and there is no proposition for any combination in which we would have both; and despite what the hon. Gentleman the Member for Enfield, East (Mr. Mackie)

said, selective employment tax, as all taxes which fall on companies and employers, and corporation tax, falls ultimately on consumers, as does the employer's share of the stamp, which, frequently, through wage rises, falls on the employees, too.
It is a wider reform of taxation which we are studying, and it has been under intensive study since the Government took office. No decision has yet been taken, but the study is continuing, and one of the questions being considered in this review is the possibility of a value added tax. I think the House would not expect me to be categorical in any way about it before a decision in principle is reached, whether it is desirable or not, but we would expect that food, apart from a few items now subject to purchase tax, would get relief. How, would be a subject for study and discussion, including discussion with the National Farmers' Union, and our present studies of value added tax envisage consultation beforehand with interested bodies.
Now, as one of my hon. Friends indicated, the best contribution the Government can make to price stability is to provide a consistent monetary and fiscal framework to encourage enterprise and competition, and this we are doing, and this strengthened competition is the best protection for the consumer.
Here I should like to pay tribute to the work of the Consumer Council and to Dame Elizabeth Ackroyd, who pioneered in this field. It was good work. It is not necessary that good work should in all circumstances continue to be carried out by the State. It was especially as a pioneering effort that this work was of value. The Consumer Council was never envisaged as having enough money to be able to get through to the great mass of the people, through the media of advertising, to achieve mass consumer education in that way. It was never intended, and because of this, and because of other things, and changes, we felt it was time that this should no longer remain a State activity. After all, the Teltag scheme took 20 per cent. or so of all the resources of the Consumer Council. The question was, should the remainder be found at the taxpayers' expense?
I think it was the right hon. Gentleman who referred to the tasks of the


Consumer Council—for instance the accumulation of knowledge; but for various reasons, in ways which were not foreseen by the Molony Committee, this was not always as successful as it might have been. The other, second, rôle which was referred to was that of the advisory and watchdog rôle of the Council. I think it is difficult in some cases to evaluate just how much and how wide this went, as my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) mentioned when it came to the question of labelled carpets.
As a result of all this, we decided that in view of the changes that had been and are being made to consumer protection law, because of the enormous increase in the use of the voluntary machine and the greater influence of voluntary bodies, and because of the work that is now being done in the trades themselves to protect traders from the less reputable elements amongst them, this is something which should not be continued by the Government.

Mr. Laurie Pavitt: rose—

Mr. Macmillan: I have very little time left and I do not intend to give way.

Mr. Speaker: Order. If the hon. Gentleman does not give way, he does not give way. Mr. Macmillan.

Mr. Macmillan: Many things have been said about the Consumer Council in the opposite sense to that in which I am speaking, and I intend to develop the argument. My right hon. Friend the Member for Wallasey gave a fascinating account of the vagaries of the industry with parts of which he is so familiar. I felt that he rather made my point, for the functions to which he was referring were those of consumer testing which is done so well by the Consumers' Association and is described in Which? He also suggested that what is required in this field is legislation. Indeed, now that he has rejoined us, perhaps he will think of introducing a Private Member's Bill.

Mr. Marples: May I intervene to say that a Private Member's Bill is ready, if my hon. Friend will accept a Ten Minute Rule Bill. The point is that the Consumers'

Association will not do the work which my right hon. Friend says.

Mr. Macmillan: I am aware that that is true of the voluntary bodies. They will not take over the work of the Council, in the sense of doing what they did—such as Teltag, the issue of free leaflets, the monthly magazine Focus and so on. But the work that the consumer groups are doing, in the National Federation, the National Citizens' Advice Bureau Council, in the circulation of Which? and similar advisory booklets, and, not least, the many women's organisations, including the Housewives' League, is having a great influence.
The House may be sure of one thing. Nothing that the Consumer Council or the Consumers' Association could do can in itself help us overcome the degree of inflation which was left by the policies of the previous Government. This Government will not seek a solution to the problems of inflation and the cost of living, to which the Motion refers, by trying to re-assemble the shattered pieces of those policies which so signally failed, as my hon. Friend the Member for Torrington (Mr. Peter Mills) described.
Rather we shall look for a change in the level of wage expectation, through getting back to responsible collective bargaining, without, I fear, very much help from hon. Members opposite. We shall not connive at inflationary settlements in the private sector and we shall use all the influence we can against them in the public sector.
Part of this policy is a move towards greater realism, and this means three separate things: first, more freedom for the individual; second, therefore, more responsibility; and third, greater help for those whose need is greatest. We see this in the policies which we are bringing forward in housing, where 2½ million people are in private housing and 1½ million are in council houses, whose local authorities work no rent rebates scheme and who now cannot get help unless they are eligible for supplementary benefit. Under my right hon. Friend's reforms, if their income and family circumstances justify it, they will qualify for rebate and some will pay less rent than they pay now. The rest will move to the concept for which we are indebted to the party opposite—fair rents for council tenants as well as for private tenants.
I would not sneer at council house tenants—far from it. But neither would I support the proposition that they are necessarily poorer than those who live in private houses under private landlords. Our measures mean that these rebates will apply to both, and that fair rents will apply to both. We shall move by stages, starting at the end of 1971, at a pace to be discussed between the Government and the local authorities. I cannot, therefore, give an answer to the rumour, or story, about the rents rising in Manchester, because my right hon. Friend has not yet discussed this point with the local authorities concerned. In addition, there will be protection for the poorest tenants.
I want to deal with the question of the change from the present system to the levy system of support for agriculture. This will remove a cause for increasing taxation, will set a limit to the call on the taxpayers' money, and so by lessening public expenditure will enable improvement in other fields, including the social services. It will also provide a built-in protection for the industry against dumped or subsidised imports and so increase the farmers' confidence in the possibilities of increased production—an increased production which could be a very valuable saver of imports.
When we come to consider the effects of this change, it is very important to differentiate between the longer-term proposals set out in the White Paper and those which have been announced as the interim arrangements on cereals, meat and minor milk products. Despite what the Leader of the Opposition has said, the Tory Party told the country before the General Election that this change would lead to an increase in food prices of between 5 per cent. and 6 per cent. spread over three years, and my right hon. Friend confirmed it yesterday. [Interruption.]

That is on the longer-term proposal—[Interruption.]

Mr. Speaker: Order. Mr. Macmillan.

Mr. Macmillan: There has been no secret and no deception. The accusation of deception is in itself an attempt to deceive the people.
The interim levy arrangements announced by my right hon. Friend on 27th October will not necessarily in general increase prices much above the present market levels, which have been rising recently because of market forces. Because of this and as part of this, we are doing more in real terms in school building, hospital building, care of the old and the mentally ill. We are giving more help to public service pensioners, to widows and the old people, and we are in fact carrying out our promise to make life better for the poorer people. I admit that from next year many families will have to pay higher charges, and charges for some services which they now get free. But what is the alternative based on the past, based on the only alternative which hon. Members opposite can offer—the increased charges which they imposed—

Mr. Alfred Morris: rose in his place, and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly,
That this House deplores the failure of Her Majesty's Government to protect the consumer, as shown by its abolition of the Consumer Council, its unconcern about rising prices, the introduction of import levies on food, increased charges for public services and the cutting of housing subsidies; and calls upon Her Majesty's Government to refrain from imposing further burdens on the housewife such as a value added tax:—

The House divided: Ayes 202. Noes 285.

Division No. 37.]
AYES
[7.0 p.m.


Abse, Leo
Bidwell, Sydney
Butler, Mrs. Joyce (Wood Green)


Allaun, Frank (Salford, E.)
Bishop, E. S.
Carmichael, Neil


Allen, Scholefield
Blenkinsop, Arthur
Carter, Ray (Birmingh'm, Northfield)


Armstrong, Ernest
Bottomley, Rt. Hn. Arthur
Castle, Rt. Hn. Barbara


Ashton, Joe
Boyden, James (Bishop Auckland)
Clark, David (Colne Valley)


Atkinson, Norman
Bradley, Tom
Cocks, Michael (Bristol, S.)


Bagier, Gordon, A. T.
Brown, Hugh D. (G'gow, Provan)
Cohen, Stanley


Barnett, Joel
Brown, Bob (N'c'tle-upon-Tyne, W.)
Coleman Donald


Beaney, Alan
Brown, Ronald (Shoreditch &amp; F'bury)
Concannon, J. D.


Benn, Rt. Hn. Anthony Wedgwood
Buchan, Norman
Conlan, Bernard


Bennett, James (Glasgow, Bridgeton)
Buchanan, Richard (G'gow, Sp'burn)
Cox, Thomas (Wandsworth, Central)




Crawshaw, Richard
John, Brynmor
Prescott, John


Cronin, John
Johnson, James (K'ston-on-Hull, W.)
Price, J. T. (Westhoughton)


Cunningham, G. (Islington, S.W.)
Johnson, Walter (Derby, South)
Price, William (Rugby)


Cunningham, Dr. J. A. (Whitehaven)
Jones, Gwynoro (Carmarthen)
Rankin, John


Darling, Rt. Hn. George
Jones, Barry (Flint, East)
Reed, D. (Sedgefield)


Davidson, Arthur
Judd, Frank
Rees, Merlyn (Leeds, S.)


Davies, Denzil (Llanelly)
Kaufman, Gerald
Rhodes, Geoffrey


Davies, G. Elfed (Rhondda, E.)
Kerr, Russell
Richard, Ivor


Davies, Ifor (Gower)
Lamond, James
Roberts, Rt. Hn. Goronwy (Caernarvon)


Davies, S. O. (Merthyr Tydvil)
Latham, Arthur
Rodgers, William (Stockton-on-Tees)


Davis, Clinton (Hackney, Central)
Lawson, George
Roper, John


Deakins, Eric
Lee, Rt. Hn. Frederick
Rose, Paul B.


Dell, Rt. Hn. Edmund
Lestor, Miss Joan
Ross, Rt. Hn. William (Kilmarnock)


Dempsey, James
Lever, Rt. Hn. Harold
Sheldon, Robert (Ashton-under-Lyne)


Doig, Peter
Lewis, Arthur (W. Ham N.)
Shore, Rt. Hn. Peter (Stepney)


Dormand, J. D.
Lewis, Ron (Carlisle)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Driberg, Tom
Lipton, Marcus
Short, Mrs. Renée (W'hampton, N.E.)


Duffy, A. E. P.
Lomas, Kenneth
Silkin, Rt. Hn. John (Deptford)


Dunn, James A.
McCann, John
Silkin, Hn. S. C. (Dulwich)


Eadie, Alex
McCartney, Hugh
Sillars, James


Edwards, Robert (Bilston)
MacColl, James
Silverman, Julius


Ellis, Tom
McElhone, Frank
Skinner, Dennis


English, Michael
Mackintosh, John P.
Small, William


Faulds, Andrew
Maclennan, Robert
Smith, John (Lanarkshire, North)


Fernyhough, E.
McMillan, Tom (Glasgow, C.)
Spearing, Nigel


Fisher, Mrs. Doris (B'ham, Ladywood)
McNamara, J. Kevin
Spriggs, Leslie


Fletcher, Raymond (Ilkeston)
Mallalieu, E. L. (Brigg)
Stallard, A. W.


Foley, Maurice
Marks, Kenneth
Stewart, Donald (Western Isles)


Foot, Michael
Marsh, Rt. Hn. Richard
Stewart, Rt. Hn. Michael (Fulham)


Ford, Ben
Mason, Rt. Hn. Roy
Stoddart, David (Swindon)



Mayhew, Christopher
Stonehouse, Rt. Hn. John


Fraser, John (Norwood)
Mellish, Rt. Hn, Robert
Strang, Gavin


Freeson, Reginald
Mendelson, John
Strauss, Rt. Hn. G. R.


Garrett, W. E.
Mikardo, Ian
Summerskill, Hn. Dr. Shirley


Gilbert, Dr. John
Millan, Bruce
Thomas, Rt. Hn. George (Cardiff, W.)


Ginsburg, David
Miller, Dr. M. S.
Thomas, Jeffrey (Abertillery)


Golding, John
Milne, Edward (Blyth)
Tinn, James


Gourlay, Harry
Molloy, William
Urwin, T. W.


Grant, George (Morpeth)
Morgan, Elystan (Cardiganshire)
Varley, Eric G.


Grant, John D. (Islington, East)
Morris, Rt. Hn. John (Aberavon)
Wainwright, Edwin


Griffiths, Eddie (Brightside)
Moyle, Roland
Walden, Brian (B'm'ham, All Saints)


Hamilton, James (Bothwell)
Mulley, Rt. Hn. Frederick
Walker, Harold (Doncaster)


Hamling, William
Murray, Ronald King
Wallace, George


Hanan, William (G'gow, Maryhill)
Ogden, Eric
Watkins, David


Hardy, Peter
O'Halloran, Michael
Weitzman, David


Harper, Joseph
O'Malley, Brian
Wellbeloved, James


Harrison, Walter (Wakefield)
Orbach, Maurice
Wells, William (Walsall, N.)


Heffer, Eric S.
Oswald, Thomas
White, James (Glasgow, Pollok)


Horam, John
Owen, Dr. David (Plymouth, Sutton)
Whitlock, William


Houghton, Rt. Hn. Douglas
Palmer, Arthur
Willey, Rt. Hn. Frederick


Hughes, Rt. Hn. Cledwyn (Anglesey)
Pardoe, John
Williams, Alan (Swansea, W.)


Hughes, Dr. Mark (Durham)
Parker, John (Dagenham)
Wilson, Alexander (Hamilton)


Hughes, Robert (Aberdeen, North)
Pavitt, Laurie
Wilson, Rt. Hn. Harold (Huyton)


Hunter, Adam
Peart, Rt. Hn. Fred
Woof, Robert


Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Pendry, Tom



Janner, Greville
Pentland, Norman
TELLERS FOR THE AYES:


Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)
Perry, Ernest G.
Mr. Alfred Morris and


Jenkins, Hugh (Putney)
Prentice, Rt. Hn. Reg.
Mr. Charles Morris.




NOES


Adley, Robert
Body, Richard
Clark, William (Surrey, East)


Alison, Michael (Barkston Ash)
Boscawen, R. T.
Clarke, Kenneth (Rushcliffe)


Allason, James (Hemel Hempstead)
Bossom, Sir Clive
Clegg, Walter


Amery, Rt. Hn. Julian
Boyd-Carpenter, Rt. Hn. John
Cockeram, Eric


Archer, Jeffrey (Louth)
Braine, Bernard
Cooke, Robert


Astor, John
Bray, Ronald
Coombs, Derek


Atkins, Humphrey
Brinton, Sir Tatton
Cooper, A. E.


Awdry, Daniel
Brocklebank-Fowler, Christopher
Cordle, John


Baker, Kenneth (St. Marylebone)
Bruce-Gardyne, J.
Corfield, F. V.


Baker, W. H. K. (Banff)
Bryan, Paul
Cormack, Patrick


Balniel, Lord
Buchanan-Smith, Alick (Angus, N&amp;M)
Costain, A, P.


Barber, Rt. Hn. Anthony
Bullus, Sir Erie
Critchley, Julian


Beamish, Col. Sir Tufton
Burden, F. A.
Crouch, David


Bell, Ronald
Butler, Adam (Bosworth)
Crowder, F. P.


Bennett, Dr. Reginald (Gosport)
Carlisle, Mark
Curran, Charles


Benyon, W.
Carr, Rt. Hn. Robert
Dalkeith, Earl of


Berry, Hon. Anthony
Channon, Paul
Dance, James


Biffen, John
Chapman, Sydney
Davies, Rt. Hn. John (Knutsford)


Biggs-Davison, John
Chataway, Rt. Hn. Christpoher
d'Avigdor-Goldsmid, Sir Henry


Blaker, Peter
Chichester-Clark, R.
d'Avigdor-Goldsmid, Mal.-Gen. Jack


Boardman, Tom (Leicester, S.W.)
Churchill, W. S.
Dean, Paul







Deedes, Rt. Hn. W. F.
Kellett, Mrs. Elaine
Rawlinson, Rt. Hn. Sir Peter


Digby, Simon Wingfield
Kerby, Capt. Henry
Redmond, Robert


Dixon, Piers
Kilfedder, James
Reed, Laurence (Bolton, East)


Dodds-Parker, Douglas
Kimball, Marcus
Rees, Hn. Peter (Dover)


Douglas-Home, Rt. Hn. Sir Alec
King, Evelyn (Dorset, South)
Rees-Davies, W. R.


du Cann, Rt. Hn. Edward
King, Tom (Bridgwater)
Renton, Rt. Hn. Sir David


Dykes, Hugh
Kinsey, J. R.
Rhys Williams, Sir Brandon


Eden, Sir John
Kitson, Timothy
Ridley, Hn. Nicholas


Edwards, Nicholas (Pembroke)
Knight, Mrs. Jill
Roberts, Wyn (Conway)


Elliot, Capt, Walter (Carshalton)
Knox, David
Roderick, Caerwyn E. (Br'c'n &amp; R'dnor)


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Lambton, Antony
Rodgers, Sir John (Sevenoaks)


Emery, Peter
Lane, David
Rossi, Hugh (Hornsey)


Fell, Anthony
Langford-Holt, Sir John
Rost, Peter


Fenner, Mrs. Peggy
Legge-Bourke, Sir Harry
Royle, Anthony


Fidler, Michael
Le Marchant, Spencer
Russell, Sir Ronald



Lewis, Kenneth (Rutland)
Sandys, Rt. Hn. D.


Finsberg, Geoffrey (Hampstead)
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Scott, Nicholas


Fisher, Nigel (Surbiton)
Lloyd, Ian (P'tsm'th, Langstone)
Scott-Hopkins, James


Fletcher-Cooke, Charles
Lloyd, Rt. Hn. Selwyn (Wirral)
Sharples, Richard


Fookes, Miss Janet
Loveridge, John
Shaw, Michael (Sc'b'gh &amp; Whitby)


Fortescue, Tim
MacArthur, Ian
Shelton, William (Clapham)


Foster, Sir John
McCrindle, R. A.
Simeons, Charles


Fowler, Norman
Maclean, Sir Fitzroy
Sinclair, Sir George


Fox, Marcus
Macmillan, Maurice (Famham)
Smith, Dudley (W'wick &amp; L'mington)


Fry, Peter
McNair-Wilson, Michael
Soref, Harold


Galbraith, Hn. T. G.
McNair-Wilson, Patrick (New Forest)
Speed, Keith


Gardner, Edward
Maddan, Martin
Spence, John


Gibson-Watt, David
Mattel, David
Sproat, Iain


Gilmour, Sir John (Fife, E.)
Maginnis, John E.
Stainton, Keith


Glyn, Dr. Alan
Marples, Rt. Hn. Ernest
Stanbrook, Ivor


Godber, Rt. Hn. J. B.
Marten, Neil
Stewart-Smith, D. G. (Belper)


Goodhart, Philip
Mather, Carol
Stodart, Anthony (Edinburgh, W.)


Goodhew, Victor
Maude, Angus
Stoddart-Scott, Col. Sir M.


Gorst, John
Mawby, Ray
Stokes, John


Gower, Raymond
Maxwell-Hyslop, R. J.
Stuttaford, Dr. Tom


Green, Alan
Meyer, Sir Anthony
Sutcliffe, John


Grieve, Percy
Mills, Peter (Torrington)
Tapsell, Pater


Griffiths, Eldon (Bury St. Edmunds)
Mills, Stratton, (Belfast, N.)
Taylor, Edward M. (G'gow, Cathcart)


Gummer, Selwyn
Miscampbell, Norman
Taylor, Frank (Moss Side)


Gurden, Harold
Mitchell, David (Basingstoke)
Taylor, Robert (Croydon, N.W.)


Hall, Miss Joan (Keighley)
Mitchell, Lt.-Col. C. (Aberdeenshire, W)
Tebbit, Norman


Hall, John (Wycombe)
Moate, Roger
Temple, John M.


Hall-Davis, A. G. F.
Molyneaux, James
Thomas, John Stradling (Monmouth)


Hannam, John (Exeter)
Money, Ernie
Thomas, Rt. Hn. Peter (Hendon, S.)


Harrison, Brian (Maldon)
Monks, Mrs. Connie
Thompson, Sir Richard (Croydon, S.)


Harrison, Col. Sir Harwood (Eye)
Monro, Hector
Tilney, John


Harvey, Sir Arthur Vere
Montgomery, Fergus
Trew, Peter


Haselhurst, Alan
Morgan, Geraint (Denbigh)
Tugendhat, Christopher


Havers, Michael
Morrison, Charles (Devizes)
Turton, Rt. Hn. R. H.


Hawkins, Paul
Mudd, David
van Straubenzee, W. R.


Hay, John
Murton, Oscar
Vaughan, Dr. Gerard


Hayhoe, Barney
Nabarro, Sir Gerald
Vickers, Dame Joan


Heath, Rt. Hn. Edward
Neave, Airey
Waddington, David


Heseltine, Michael
Nicholls, Sir Harmar
Walder, David (Clitheroe)


Hicks, Robert
Noble, Rt. Hn. Michael
Walker, Rt. Hn. Peter (Worcester)


Higgins, Terence L.
Nott, John
Walker-Smith, Rt. Hn. Sir Derek


Hiley, Joseph
Onslow, Cranley
Wall, Patrick


Hill, James (Southampton, Test)
Oppenheim, Mrs. Sally
Walters, Dennis


Holland Philip
Orr, Capt. L. P. S.
Ward, Dame Irene


Hordern Peter
Osborn, John
Weatherill, Bernard


Hornby, Richard
Owen, Idris (Stockport, North)
Wells, John (Maidstone)


Hornsby-Smith, Rt, Hn. Dame Patricia
Page, Graham (Crosby)
White, Roger (Gravesend)


Howe, Hn. Sir Geoffrey (Reigate)
Parkinson, Cecil (Enfield, W.)
Whitelaw, Rt. Hn. William


Howell, David (Guildford)
Peel, John
Wiggin, Jerry


Howell, Ralph (Norfolk, North)
Percival, Ian
Wilkinson, John


Hunt, John
Peyton, Rt. Hn. John
Wolrige-Gordon, Patrick


Hutchison, Michael Clark
Pike, Miss Mervyn
Wood, Rt. Hn. Richard


Iremonger, T. L.
Pink, R. Bonner
Woodhouse, Hn. Christopher


Irvine, Bryant Godman (Rye)
Pounder, Rafton
Woodnutt, Mark


James, David
Powell, Rt. Hn. J. Enoch
Worsley, Marcus


Jenkin, Patrick (Woodford)
Price, David (Eastleigh)
Wylie, Rt. Hn. N. R.


Jennings, J. C. (Burton)
Prior, Rt. Hn. J. M. L.
Younger, Hon. George


Jessel, Toby
Proudfoot, Wilfred



Jones, Arthur (Northants, South)
Pym, Rt. Hn. Francis
TELLERS FOR THE NOES:


Jopling, Michael
Quennell, Miss J. M.
Mr. Jasper More and


Joseph, Rt. Hn. Sir Keith
Ramsden, Rt. Hn. James
Mr. Reginald Evre.

POST OFFICE AFFAIRS

7.10 p.m.

Mr. Ivor Richard: I beg to move,
That this House censures Her Majesty's Government for their recent handling of Post Office affairs, and the implications of their action in dismissing Lord Hall, the Chairman of the Post Office Corporation.
At the outset I should like to say that it is a matter of some personal regret that the first speech I make in my present position on the Opposition Front Bench is one in which I have to move a Motion of Censure on the Minister of Posts and Telecommunications. We regard this as a serious matter, with serious implications, and a serious case has to be made. Therefore, although I fully accept that the temperature is bound to rise in the course of the evening and that tempers are bound to get somewhat heated—[HON. MEMBERS: "Why?"]—hon. Gentlemen may have greater experience than I have, but I have never yet known a censure Motion in which temperatures did not rise and tempers did not get moderately heated—I hope that the House at least will listen to our case.
We believe that the Government have been careless of the reputation and welfare of the Post Office and its employees and that they have been guilty of gross political interference in the affairs of the Post Office Corporation. I hope in the next fifteen minutes or so to justify both those charges.
I cannot believe that the Minister is happy at the results of his action. Looking back over the past week's events, he surely cannot be content with the summary dismissal of Lord Hall, the Chairman of the Post Office Corporation, at an interview between the Minister and Lord Hall. Spontaneous industrial action has taken place by the Post Office workers. It is surely unique for workers in this country to be demonstrating because their boss has been given the sack. Certainly in the last week there has been a serious break in morale and a grave loss of confidence in the Post Office and its management.
I cannot believe that if the Minister could have the last week over again he would act either in the same way or with the same object. Indeed, I believe that he has handled this matter with a mala

droitness rarely equalled even by this Conservative Administration —[HON. MEMBERS: "Rubbish."]—which, to say the least, is somewhat lacking in diplomatic finesse. However, the Minister is certainly well in line with the rest of the Government's leadership. Indeed, the events of the last week, the dismissal and the consequences of the dismissal, are on their own enough to justify this Motion of censure.
What do we know of the facts? Early last week a meeting took place between the Chairman of the Post Office Corporation and the Minister at which the Chairman was summarily dismissed. Whether that meeting took place on Monday or Tuesday and whether the Chairman resigned or merely accepted the Minister's invitation to resign matters not. What does matter, however, are two facts which appeared in most of the weekend Press and in most of the accounts given of this meeting. Firstly, it is apparently said that at that meeting Lord Hall pressed the Minister for a clear reason for his dismissal but again, according to Lord Hall, he got none. If that is right, it is indeed quite extraordinary. If the allegation is that Lord Hall was dismissed because he was unfit, or was incompetent, or for some other reason, it is quite surprising that at the time of the dismissal he was not given the reason.
Secondly, it seems to have been accepted in all the Press accounts in the last week that at some stage Lord Hall asked for some additional time to arrange his leaving in such a way as to cause the least damage to the Post Office and to the Corporation. Again, we are told by Lord Hall, this was refused. If that were so, we are entitled to ask, and indeed do ask, why it is that, in circumstances in which a dismissed employee is apparently attempting to leave in such a way as to cause the least damage to the organisation by which he has been employed, such a request is refused.
At a meeting thereafter of the Board, we know, the Deputy Chairman of the Board became acting Chairman. Again, it is surprising that no successor was then ready, if this had been in the Minister's mind for some time. We have heard different accounts as to when it was in the Minister's mind that Lord Hall should be dismissed. Some accounts say that it was in his mind as long ago as last


August. If that is so, it is a little strange that at that meeting matters were arranged in this way. Perhaps the name of the chosen successor was so obviously a political one that it would have given the game away if it had been revealed at the beginning of last week. We do not know who it is, and I ask the Minister tonight to say when a successor will be appointed. When will he be known, and could the Minister say something about the time table?
The next stage in this unhappy affair seems to have been late on Tuesday evening, when highly damaging rumours alleging incompetence were circulating in Fleet Street. Why was no statement made to the House of Commons at the earliest possible moment? Did the Minister believe that a matter of this sort could be kept secret from the Press or the House of Commons? I do not think he thought that for a moment. What I think happened in this case was that the Minister had no intention of announcing this in the House of Commons but obviously hoped to be able to get away with it by deferring an announcement until a time when he could not be challenged. My information is—and I hope that the Minister will be able to confirm this—that on the Wednesday he was due to be in Leeds and not even in London. If that is so, it was treating this House with an arrogance and disdain which almost amounted to contempt. This is well in line with the recent performance of his right hon. Friend the Prime Minister. We consider that the Minister's actions last week amount to a contempt of the House of Commons and that they deserve censure.
Last Wednesday the Minister came to the House to answer a Private Notice Question. I do not know what he would have done if such a question had not been asked, but at any rate on 25th November he appeared in the House. Most hon. Members who were present on that occasion will agree that his performance can be summarised as saying, "I am not going to tell you what the reason was".
This attitude is utterly unacceptable to this side of the House. Indeed, it is the main reason that the Motion has been put down and that the debate is taking place. If the Minister thinks that Lord Hall is incompetent, let him say so tonight. If the Minister believes that

Lord Hall is unfit to occupy this position, let him say so tonight. If there is a genuine clash of temperament and personality, again let the Minister say so tonight. But for the Minister merely to come to the House of Commons, as he did last week, and to hint at matters which are unmentionable but which are discreditable to Lord Hall is a disgrace to his office, grossly unfair to Lord Hall, and a breach of the duty that the Minister owes to the House of Commons.
We therefore require from the Minister tonight a full explanation of the circumstances surrounding this dismissal. We want to know why, and we want to know this evening. With respect to the Minister, the kind of arrogant silence that we have had from him so far is not good enough. Indeed, the general effect of all the evasion of last week has been to create the maximum amount of speculation and the worst possible impression of the Post Office and its higher management. Indeed, the Government deserve censure for that, if for nothing else.
Why are we so concerned about this matter? The reason is simple. There is a deep suspicion on this side of the House about the Government's intention towards the Post Office. We suspect that the Government want to do at least three things which are politically highly controversial and for which a more amenable Chairman would be preferable. I have put these three points to the right hon. Gentleman before and if he will bear with me—or if he will not—I shall put them to him again.
First, we suspect that the Government have the intention of amending or repealing the Post Office Act so as to remove the present right of the Post Office to engage in manufacture. That is a right which certainly the Press say Lord Hall was anxious to exercise.
Secondly, we suspect that the Government have the intention of hiving off some of the more profitable parts of the telecommunications side of the industry to private enterprise, leaving the more unprofitable and unpleasant parts to be run by the Post Office Corporation. We on this side of the House utterly reject this doctrinaire view of the functions of a nationalised industry.
Thirdly, we suspect that the Government are considering interfering with the


future of the Giro which we on this side welcomed as an imaginative and successful scheme—[Interruption.] Hon. Gentlemen may howl, but perhaps they would care to read the White Paper—on which again the Chairman was apparently keen.
At the Conservative Party conference this year the Minister made a speech. Indeed, looking at that speech it is apparent that our suspicions are well-founded. Talking about the Post Office—it is somewhat ironic to read it now—the Minister said:
From this Government the Post Office, like the other nationalised industries, will get the incentive and the encouragement to behave like a commercial concern.
The Post Office got the incentive and the encouragement to behave like a commercial concern by the sale of the profitable assets and by the sacking of its Chairman. It is an extraordinary doctrine for private enterprise.
The Minister went on:
We are looking across the field for opportunities to expand areas of competition. What has been said today by one or two speakers about the possibility of enabling private enterprise to play a larger part at the subscriber's end of the system is one that is very much in my mind. When we look for opportunities to expand areas of competition we should be looking particularly at this aspect of the telecommunications service. It will be my intention also in the near future further to strengthen the Board of the Post Office with new people from outside and with people from private industry.
That is what the Minister said at the Conservative Party conference this year. On the basis of that speech anybody who is concerned about the future of the Post Office has indeed a right to be extraordinarily suspicious of the Government's intentions. We therefore believe that our suspicions are justified. This dismissal is, in our view, due primarily to the desire on the part of the Government to try to find a more pliant and politically more amenable Chairman.
Last Wednesday the Minister said that there had been no major policy differences between himself and Lord Hall. I do not believe him, except on the narrowest possible construction of those words. It would have been more honest if the Minister had said, "No major policy differences—yet". The Government knew that with Lord Hall as Chairman they would have a fight on their hands if they proceeded to try to

dismember the Post Office. This dismissal was carried out so as to ease the way in future if they decided to proceed with their stated policy. There was clearly a major difference of attitude between the Minister and the Chairman, and the Government wanted a more pliant and, indeed, a more pliable man. If this is repeated in the other nationalised industries, the Government will be making a major departure from policy over the last 20 years.
I therefore ask the Government tonight for three specific and categoric assurances. If they are interested in allaying suspicions which not only we on this side of the House have, but indeed a large part of the country has, then they should take this request seriously and should answer it.
First, have they any intention of repealing or amending the Post Office Act so as to remove the Post Office's right to manufacture? Indeed, will the Minister give us an assurance that the Government have no intention of issuing a general directive to the Post Office forbidding such manufacture?
Secondly, I ask the Government for an assurance that they have no intention of hiving off any part of the present Post Office activities to private enterprise.
Thirdly, I ask the right hon. Gentleman for an assurance that the Giro will continue and will be encouraged to expand.
So far, the Government have failed to give us these assurances. This is the third time of asking for these assurances, and I hope that tonight, at any rate, the Government will come clean and direct themselves to these issues. So far they have failed to give these assurances. They have, therefore, only themselves to blame for this Motion of censure this evening. The Minister's evasion in this House and his summary behaviour outside make us condemn his recent actions as highly damaging to the welfare of the Post Office and its employees. It was a flagrant piece of political intervention in the affairs of the Post Office and, as such, it deserves the censure of this House and of the country.

7.28 p.m.

The Minister of Posts and Telecommunications (Mr. Christopher Chataway): The House may well wonder what


exactly it is that we are here for after listening to the speech of the hon. Member for Barons Court (Mr. Richard). If that was the speech of a Motion of censure, it was a very peculiar Motion of censure.
Certainly the debate is taking a very different shape from that which was foreshadowed last Wednesday. Then we understood that it was to be a Motion of censure on the Government for dismissing Lord Hall. But it is not that at all when we look at the Motion.
We understood last Wednesday that the Opposition might well be arguing, as they seemed to be arguing in their questions then, that the Government had no right in any circumstances to get rid of the chairman of a nationalised industry—[Interruption.] But we find today that the Motion has two parts. One part seeks to censure the Government not for their action in dismissing Lord Hall, but for the implications of their action. What exactly that means is not yet clear—[Interruption.] The hon. Gentleman asks me to tell him what their Motion of censure means. I will tell him as much as I can this evening, and I will tell him a good deal, but that I cannot tell him.
The Motion of censure also seeks to condemn the Government for their
recent handling of Post Office affairs".
It was largely matters to do with the Post Office, not, I should think, matters which would warrant anything in the nature of a Motion of censure, about which the hon. Gentleman spoke. I shall be delighted to deal with those matters, and I look forward to coming to the Government's
recent handling of Post Office affairs",
because it is, after all, only five months since we took over from the previous Administration the largest ever deficit on the postal services. I was rather surprised that, on a Motion of censure to do with the
recent handling of Post Office affairs
the most important decision of all that the Government had to take in relation to postal tariffs was not mentioned. As I say, I should like to touch on all these issues.
I must make it clear again that none of the issues raised by the hon. Gentleman

had anything to do with Lord Hall's going. His departure had to do solely with the judgment about his fitness and ability for the very sizeable job of Chairman of the Post Office Corporation. It had nothing to do with policy differences. The hon. Gentleman was discourteous enough to say that he does not believe me. He will perhaps notice that, in the agreed statement issued, it was said that there were no major policy differences. That statement was agreed by Lord Hall. Why should Lord Hall say that there were no major policy differences? That is a conundrum to which the hon. Gentleman supplies no answers.
It has been suggested by the hon. Gentleman, as by others outside, that the present Board of the Post Office would be likely to be more pliable than Lord Hall. I have not the least doubt that, if there were any proposal from the Government that was genuinely believed to be against the interests of the Post Office, the present Board, which is now very united, would oppose it far more effectively than before. In one of the most odd of the points the hon. Gentleman made and of the questions he posed, he asked me whether a successor had been decided upon. He said that he thought that it was strange that, if we had been considering the fitness of Lord Hall for this post, we should not already have chosen a successor.
We would not in this Administration think it right to go to individuals outside and ask them to take on the chairmanship of a nationalised industry before we had even told the existing chairman. Whether, in the case of Sir Stanley Raymond, of British Rail, Mr. Peter Parker was actually asked before Sir Stanley knew he was dismissed, I cannot say, but it was widely believed that he was. That is not conduct that we should wish to follow on this side of the House.
The Opposition now make it clear that they are not arguing that it is always wrong for the Government to seek the resignation of the chairman of a nationalised industry, and it would be strange if they did, because over 70 hon. Members opposite are now calling for the resignation of Lord Robens from the National Coal Board. I think that it will be clear that no Government would lightly take the decision to ask the chairman of a nationalised industry or a member of a


board to resign. I do not imagine for a moment that the right hon. Member for Blackburn (Mrs. Barbara Castle) took the decision to dismiss Sir Stanley Raymond from British Rail or that the right hon. Member for Bristol, South-East (Mr. Benn) lightly took the decision to ask Mr. Wrangham to leave Shorts. I do not know whether they were right or wrong. What I do not question is that they had a duty to make up their minds.
Both personally and on political grounds, there is every incentive for a Minister to avoid taking this sort of action if he can. It is a personally painful matter to undertake and politically it certainly has no attractions. There is always a great deal of publicity and yet the Minister can never spell out the incidents and issues which have led him to the view that the person is not up to the job. Where there is conflict between the Government and an individual, naturally the Press reaction—it is a healthy one—is to take the side of the individual. The Minister certainly cannot name the individuals he has consulted or call in aid the judgment of others. [Interruption.] I see that that is being doubted. When the right hon. Member for Bristol, South-East was involved in the dismissal of Mr. Wrangham, he had this to say in reply to a question:
I decided that it was right to make a change in the chairmanship of Shorts, and since it is not customary to discuss in the House advice which a Minister takes inside his Department, I thought it right not to answer it specifically."—[OFFICIAL REPORT, 11th July, 1967; Vol. 750, c. 421.]
I agree with the right hon. Gentleman. I think the procedure he followed was correct. But the point I am making is that it is a good deal harder in the public sector than in the private to bring about the resignation of those who, it is felt, are, for whatever reason, unfit for the tasks with which they have been entrusted.

Mr. Robert Sheldon: Of course it is very much harder to bring about the resignation of someone in the public sector, but the world has moved very considerably over the past few years and it is no longer the rule as it used to be—[HON. MEMBERS: "Question."]—an intervention does not always have to be a question—that people can go quietly on the gentlemanly

terms under which they used to go. When they do not, it is important, if a major public servant is sacked, that this House be informed so that we can decide whether it is politics that is forcing the decision or in this case the administration of the Post Office.

Mr. Chataway: The hon. Gentleman is taking the line advanced by the Leader of the Opposition and some others last Wednesday, calling, in not too specific terms, for the reason. I made it clear then that the reason was that I believed that this decision was in the interests of the efficient management of the Post Office. The hon. Member for Barons Court says that it is disgraceful that I did not state my reason. He asks whether I will now say that Lord Hall is incompetent. If the Opposition are arguing that they have the interests of Lord Hall at heart, do they really want that kind of denunciation in the House tonight?

Mr. Harold Wilson: The right hon. Gentleman was kind enough to refer to me a moment ago in relation to the questions I put last week. He has just read out to the House, perfectly fairly, some remarks made by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) in the case of the Chairman of Shorts. The right hon. Gentleman said that this was why he could not tell us whom he consulted. But since he referred to my questions last week, he might recall the question I put to him, which was whether he consulted or canvassed members of the Board or middle management. He has said that it is not the practice of the Administration to do so. Did he consult or did he not?

Mr. Chataway: Most certainly not. It would have been totally wrong and inappropriate to go to middle management"—[interruption.]—the right hon. Gentleman said "middle management"—and it would be equally wrong to go to members of a board, and ask, "Should your chairman be sacked?" The right hon. Gentleman is quickly casting away whatever pretentions to statesmanship he may have had. He is back almost to his Bank Rate Tribunal leak form. What an extraordinary question for a former Prime Minister to pose—[Interruption.]

Mr. Speaker: Order. We want to hear both sides.

Mr. Chataway: rose—

Mr. Robert Maclennan: rose—

Mr. Chataway: I have made the point—

Mr. Maclennan: rose—

Mr. Speaker: Order. I have said before that, if a Minister does not give way, mere bobbing up again and again does not make him do so.

Mr. Chataway: I have made the point that it is, I believe, more difficult in the public sector to make changes than in the private. It has been suggested that chairmen of nationalised industries are particularly vulnerable. I believe that to be the opposite of the case. Yet it is essential that, in the public sector, the Government should have the right of dismissal. Among the very large number of appointments which fall to be made by Governments, it would be odd if mistakes did not occur from time to time, and where a Minister comes to a considered conclusion, as I did prior to last week, that a chairman is unfit for his particular job, he has the duty to make a change, and he must of course have the power.
If, by building up this case in the exaggerated way they have, the Opposition want to make it even more difficult to effect changes where they are necessary, they will, I believe, be doing considerable disservice to the nationalised industries. If, by their conduct in this case, they were to make it even harder for themselves, if ever they were returned to power, to make necessary changes, they would be hampering the further pursuit of efficiency in the public sector. It would be adding one more reason for never accepting nationalisation unless there were no alternative. In my view there can therefore be no doubt about the right and duty of Governments to make changes of this kind where they are considered absolutely necessary.
The hon. Member for Barons Court has said of this dismissal, first, that it was extremely ham-fisted, and then that it was carried out with maladroitness. Those, again, are odd phrases to be coming from the benches opposite. In the case of Sir Stanley Raymond journalists got to know before Sir Stanley himself. He was called

from a meeting of trade unionists and told by the right hon. Lady that a story was appearing in the newspapers on the following day. In the case of Mr. Wrangham, the Chairman of Shorts was first told that he would be dismissed not by the right hon. Gentleman but, I believe, by Mr. Chapman Pincher of the Daily Express.
Against that background I turn to the sequence of events in this case. Lord Hall came to see me last Monday afternoon and I told him then that in my opinion he had not the qualities necessary for the leadership of the Post Office and that I was therefore asking for his resignation. At that meeting I suggested that he would want to see his lawyers and others. While he was with me I arranged, on the telephone, for him to have an interview with the head of the Civil Service to discuss his constitutional position—his right to compensation, and so forth.
On the following day a a second meeting, at which we were joined by various advisers, Lord Hall agreed to relinquish his office and agreed a Press statement in relation to his leaving. The statement, which Lord Hall joined in drafting, said that he was leaving his post as chairman of the Post Office at my request; that there had been no major disagreements on matters of policy; that Lord Hall would receive compensation for loss of office, and that the terms were under discussion.
Lord Hall told me then that he would not thereafter wish to add any public comment to the statement, and I told him that in those circumstances I would do my best to avoid any public criticism of him. It was agreed that the statement should be put out the following day, to give time for the senior management of the Post Office to be informed. In the event, however, it was necessary to release it later that night, after it had become apparent that the Press had got hold of the story. [An HON. MEMBER: "Chapman Pincher?"] The hon. Member says "Chapman Pincher". The difference was that in this case Lord Hall learnt of this decision from me, and we had two meetings, at the second of which we were able to agree on a Press statement, before there was any Press comment. That compares pretty favourably with the two instances that I have mentioned.

Mr. Richard: The right hon. Gentleman will no doubt have seen in the Press this weekend an allegation by Lord Hall that the Minister attempted to persuade him to resign on the ground of ill health. Is there any truth in that?

Mr. Chataway: There was no truth in the suggestion—which I have seen—that at the second meeting there was a draft statement saying that he had resigned on the ground of ill-health[HON. MEMBERS: "Answer!"] There are great shouts of "Answer!" but I am given no opportunity to answer. There was a discussion at the first meeting about the grounds on which Lord Hall would resign and which would do least damage to him. He said immediately that he did not wish to have it said that he was resigning on the ground of ill-health, and I accepted that straight away.

Mr. Andrew Faulds: You suggested it!

Mr. Chataway: Over the two or three days after Lord Hall's resignation—

Mr. Faulds: You suggested it!

Mr. Chataway: I always hope that some casting director will come to the House wanting an extra for a particularly noisy crowd scene.

Mr. Faulds: rose—

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. Member for Smethwick (Mr. Faulds) must give way.

Mr. Chataway: I feel that the hon. Member's ability to make a noise ought to be put to some constructive purpose.
Over the next two or three days it was unclear, from Lord Hall's statements on television, the radio and in the Press, whether or not the position still remained that he had agreed to relinquish his post. He spoke of an illegal act on the part of the Government. He spoke of himself as still being head of the Post Office. Yet he issued a farewell message to the Post Office staff. On Thursday he said that his own case should be forgotten in the interests of the Post Office, and he said that he had decided to accept three jobs. On Friday, however, I received from Lord Hall's solicitors a letter asserting that Lord Hall still holds office as chairman,

although accepting that in the circumstances it is difficult for him to perform his functions.
Today I have seen a further report in the Financial Times that Lord Hall has declared that he has been sacked, that as far as he is concerned the thing is over and done, and that what he said about legal action was on the advice of his lawyers. He said:
They thought it necessary at the time. It will not be taken any further.
But in the circumstances created by the solicitor's letter I have no alternative but to use my powers under the Act and to declare the office vacant. I have written to Lord Hall's solicitors accordingly.
I believe that the House would want to make every allowance for the strain and emotional stress involved in a situation such as this, but the erratic nature of Lord Hall's reactions may give the House some appreciation of the reasons for the Government's belief that a change was necessary at the head of the Post Office.

Mr. Harold Wilson: Smear!

Mr. Chataway: The Leader of the Opposition has the nerve to say "smear", after he had asked for reasons. I believe it reasonable and right, in the circumstances that have developed in the last few days, to point to the somewhat erratic nature of the reactions that have followed and to say that it had become absolutely clear over the months that more consistent and coherent leadership was essential in the Post Office.

Mr. Richard: May I ask the right hon. Gentleman once more whether he suggested to Lord Hall that he should resign on the ground of ill health? If so, why?

Mr. Chataway: I asked Lord Hall, if he was accepting—and he was at that point accepting—that he should relinquish his post, on what grounds he would feel that least damage to his reputation would arise, and the ground of ill health was certainly one of those discussed.

Mr. Faulds: Honest government!

Mr. Deputy Speaker: Order. I hope that I shall not have to ask the hon. Member for Smethwick (Mr. Faulds) to give order again.

Mr. Chataway: Before coming to the specific issues raised by the hon. Member for Barons Court I want to refer briefly to comments made on television by the right hon. Member for Wednesbury (Mr. Stonehouse). His opinions, such as they may be at any given moment in time, are obviously a matter for him, but there was one statement of his in the programme "24 Hours" to which I took—and I believe that the House would take—considerable exception. He said that the Minister had allowed:
his own civil servants to spread leaks to the Press
and this was a
most deplorable way to behave".
There is no truth in that allegation. No leaks were spread to the Press by my Ministry. Anything put out by my Ministry—and I have explained the circumstances in which the statement was put out in the early hours of Wednesday morning—was authorised by me, and it is a sad thing for the right hon. Gentleman to make that accusation against civil servants who were loyally and ably serving him up to the General Election.
The hon. Member for Barons Court has asked for a number of assurances and has again raised two or three matters that are of interest to him. On the question of the manufacturing of equipment I have to tell him that I have no proposals for amending the Post Office Act, in so far as it deals with the manufacture of equipment but, equally, I do not intend to encourage the Post Office in any extension of its manufacturing activities.
It has been suggested—again, I think, by the right hon. Member for Wednesbury—that there must have been a furious row about a proposal from the Post Office to acquire Standard Telephones and Cables. There was some passing reference by, I think, the Chairman of the Board when first I arrived in the Ministry to a proposal for extending manufacturing in this way. I gave him to understand that this would not be a proposal to which I would be likely to assent—[An HON. MEMBER: "Oh."] That the hon. Gentleman should be surprised surprises me. The matter was never raised again and it was never pressed by the Chairman.
Since the matter of S.T.C. has been raised, I have made a few inquiries. I am told that there was never the slightest possibility that I.T.T., which controls S.T.C., would assent to the purchase of the latter and that the whole thing appears to have been an illusion. The right hon. Gentleman seemed to get very excited about it, but it appears only as further evidence of the cloud cuckooland in which so many of those transactions appear to have taken place.
On the other matter which the hon. Gentleman raised, the Giro, I am sorry that the future of Giro has been brought into this dispute. There was no disagreement between Lord Hall and myself on this matter. There is a review under way of the Giro activities. I have not previously said anything in public about Giro because I was anxious that nothing should be said which would undermine confidence in it. But clearly, the Government has to look at a matter such as this since the Giro is at the moment losing £6 million a year. No incoming Government could fail to investigate thoroughly an activity which was losing on that kind of scale.
When, moreover, one remembers that right hon. Gentlemen opposite, in launching it, said that the Giro would have a million subscribers in a year and that it has 400,000 after two years, when one remembers that it was said at the launching that it would be breaking even by 1970 and that now it is clear that it could not break even within the next three or four years, it is astonishing that there should be criticism from the Opposition Front Bench of the Government for looking at this matter in detail.
Of course I cannot give undertakings today. What I will say is that I was extremely impressed by the work which is being done at Bootle at the headquarters of the Giro, that no decision has been taken, that my mind is certainly not closed on the issue. The case for Giro is that it provides a useful, worthwhile service, and that its launching was bungled by the Labour Government.
This is a matter which must be under review, but I recognise that it is important to reach a decision as soon as possible. Over recent weeks, I have been having from the Post Office the information, the proposals, the forecasts upon which ultimately we will be able to come


to a decision. But what we have to decide is whether and when this service can break even.
This has been a sorry Motion—

Mr. Richard: Telecommunications.

Mr. Chataway: Yes, the hon. Gentleman also asked about telecommunications. Equally, if he wants some categorical blanket assurance that nothing will ever be done, I have made it clear that the Post Office is not exempt from the Government's policy on nationalised industries. The House knows that, in the nationalised industries, we are looking for further areas of competition. I mentioned one at the Conservative Party Conference, and that is a review which is still under way.
This has been a sorry Motion. It talks—

Mr. J. T. Price: Before the right hon. Gentleman leaves telecommunications. He was at great pains to spell out that, during recent years, the Post Office has been losing money, has been in the red. He did not tell the House that the telecommunications side of the Post Office is making vast profits which are revealed in the Post Office accounts. Will he tell the House what profits the telecommunications branch made last year?

Mr. Chataway: The telecommunications branch is showing an 8½ per cent. return on net assets—[Interruption.]—that is the target which has been reached.
This Motion speaks of the handling of Post Office affairs, and the major issue in regard to the Post Office, as the hon. Member knows, has been the record deficit to which I referred at the outset, and the necessity for a record increase in postal tariffs. We did, of course, over the summer, as a result of the work of the Users' Council and of studies initiated by the Government, save about £30 million on the original demands of the Post Office.
But I do not blame the Post Office Board for the situation which we inherited from the previous Administration. The Board had to contend with astonishing vacillations from right hon. and hon. Gentlemen opposite when they were in government. Throughout the early part of this year, they asked repeatedly for some answer to their demands for an

increased postal tariff, and they got none. Immediately before the General Election, they had reached the point at which they—the Post Office—had to decide whether or not to go ahead with the printing of decimal stamps. The right hon. Gentleman was interested only in the election, in seeing whether he could conceal until after the election the fact that very large postal tariff increases were necessary.
Therefore—and I believe that they were absolutely right—the Post Office Board decided, since it was the last available date by which they would be able to order the printing and still have the necessary stamps on Decimal Day, to order the printing of decimal stamps at the new tariff. They knew and the Government knew, and if the Government had wanted to, they could have stopped them by issuing a direction. But they did not.
I believe that the hon. Member for Barons Court is tempting fate in speaking about these matters. He might reflect, since he has a majority of just over 1,000, what might have been the result if it had been known during the election that this printing had been taking place.
This is a sorry Motion. It does no good to Lord Hall, it does no good to the Post Office, and it certainly does no good to the Opposition. Wrestling with their own internal arguments on industrial relations and all the rest, no doubt they believed that this was one thing on which they could unite. But I believe that it will be seen by the country as one more manifestation of an Opposition who have not the faintest idea where they are going.

7.59 p.m

Mr. John Storehouse: Before I come to the extraordinary actions of the Minister during the past few days, I think it is important to get on record some of the background facts to the situation which we are discussing, so that the House may be able to make an intelligent decision on it.
First, of course, it is not the case that Lord Hall was appointed to be the chief executive of the Post Office. Suggestions which are being made that he was to do this job are quite inaccurate. Lord Hall was appointed to be the Chairman and co-ordinator of a board of directors made up of men chosen both from within the Post Office and from outside industry, so


that there could be a marrying of the traditional ideas of public service and efficiency in the Post Office itself and the ideas of commercial energy and initiative which could be brought in from outside.
So it was that I appointed from outside two directors who were to be responsible for the two main businesses of the Post Office. Mr. Vieler was appointed to run the posts and Giro section—a man with eminent qualifications as an accountant—and Mr. Fennessey, one of the senior executives of the Plessey organisation, was appointed to become director of the telecommunication section. The other main business—the National Data Processing Service—was run by a director from inside the Post Office itself; a man who had also had considerable experience in the computer section of the Ministry of Technology. I also brought in as deputy chairman Mr. Whitney Straight from Rolls-Royce—another marrying of experience from outside.
Lord Hall, when asked by me to take on this position, was specifically asked to be co-ordinating Chairman and not chief executive. Therefore, all the suggestions that he was not competent to do the job of chief executive fall down. The man who was appointed to be the chief executive was Mr. Bill Ryland, who had had much experience, including senior position in the G.P.O. He was appointed as chief executive and deputy chairman.
The rôle of Lord Hall was to be the co-ordinating Chairman and to assist the Post Office during the crucial transitional stage from a Civil Service Department to a commercial organisation; to assist the men who were coming in from outside to marry their ideas with those of the men who came from the G.P.O. itself. His job was not to run the Post Office as the chief executive. I considered at the time that he was competent to be the co-ordinating Chairman, and today I consider that he is competent to do that job. It is a mistake for the Minister to smear Lord Hall by implying that he was not up to a job to which he was not appointed.
The Post Office Corporation undertook an immense operation, and I think that it is only now that hon. Members and the public outside are beginning to realise just how immense it was. First, the Corporation had to operate in a

commercial environment and yet, at the same time, to keep on good terms with the Whitehall machinery, which was increasingly suspicious of its own child which was pulling away and wanting to be independent. It is not just Ministers at the top, as the right hon. Gentleman now is and as I was, who have had this experience; it goes right down the line through the Ministry, and in the Post Office there was bound to be friction on both sides as the Corporation tried to live up to the job it was asked to do—to operate independently in a commercial environment.
During the period I was Minister that gave rise to great stresses and strains, and I can give one example. When the Corporation decided that it would inject some liveliness into the Giro system by going into an arrangement with Mercantile Credit so that Giro account holders could easily obtain credit from another organisation, there was a great deal of feeling on our side that the Post Office was perhaps going too far too quickly. But who, on reflection, can complain that Lord Hall did the wrong thing? He did the right thing. The Post Office Board did the right thing. It was doing just the sort of thing that the Corporation was set up to do—namely, livening up the service, doing something in a commercial environment which provided a service for the Giro account holders. It has, indeed, been a welcome infusion to the sort of service which Giro can provide, but it gave rise to tension at the time.
The next big job which the Corporation has had to do has been reforming the G.P.O., this great and wonderful public service which has grown up over the years but which has, as one would expect, developed, as any large organisation has, inefficient sectors in its service—barnacles on the ship. It was the job of the Corporation to strip off those barnacles and to make the Post Office more efficient in its main job. This is a delicate operation requiring the co-operation of the staff and the trade unions concerned because so many practices have developed over the years which the trade unionists regard as a right as, indeed, do senior executives, and some of these practices have to be eliminated in the new commercial environment if the Post Office is to be truly efficient. This is a job


which the Corporation was going about in an independent way.
Third, the Corporation had to prepare for the revolutionary new communications system in Britain which is already beginning to develop and which within ten or 15 years will completely transform the way in which we communicate with one another. The postal system itself will decline in that period as more people take to communicating by wire and microwave. When documents can be put in a machine and be received almost instantaneously in facsimile reproduction 3,000 miles away, obviously we must realise that the traditional Post Office to which we have become accustomed will go into a state of decline. The Corporation had to prepare for this, and it was doing just that job. The Corporation took on an immense operation.
Lord Hall himself was conscious of this great responsibility and thought that in order to achieve success in these tasks the Corporation had to maintain good relations with the staff, on the one hand, and with Whitehall, on the other, as well as explaining to the public and to consumers at large what the Post Office was doing. With regard to the first, we can all agree with my hon. Friend the Member for Barons Court (Mr. Richard) that the staff's loyalty to Lord Hall is quite unique. The Corporation has achieved the loyalty and support of the staff. That is an asset which the Minister should never consider throwing away, but which I believe he is in danger of throwing away by the action he has taken. As I have already said, the relationship with the Ministry was a delicate and sensitive matter, and here I believe that Lord Hall failed by trying to do too much too quickly and by being insensitive to the feelings of his political masters.
The Minister's reference to the printing of the stamps is an example I can use, because this occurred when I had Ministerial responsibility. I cannot refer to conflicts that may have taken place since 18th June, but I can say that I suffered somewhat from Lord Hall's misunderstanding, and I think that it was genuine, of the proper relationship between a Minister and the chairman of a board.
Some of the points which the Minister has made about the printing of the stamps

are certainly correct but some are inaccurate. In particular, the Minister said that the Post Office Board had to print the stamps to meet its objective of printing stamps by D-day, next February. This was not the original intention of the Post Office. Its original intention was to print stamps for distribution in January. It was after some weeks of delay that it was decided to switch the original plan for an increase in the tariffs some time this year to an increase in January, and it made proposals to me on those lines.
It was in my mind that it would be more appropriate for the increases to occur on D-day when the currency changes took place. It was in my mind that the necessity to print stamps at the time the Post Office wanted to print them was not so essential as it thought. It is true that the Post Office Corporation brought to me a proposal for an increase in tariffs. It originally made proposals for an increase of one penny in the first and second-class rates.
Those proposals were under consideration when the Post Office Corporation changed its plans and, because it considered the financial situation on the postal side to be so serious, it regarded an increase of 2d. in both cases to be more appropriate. I believed that such an increase was totally unwarranted both at the time and for early 1971, as was being suggested. I discussed this with my colleagues and put forward this point of view.
In my view, although I had not had an opportunity of making a clear Ministerial decision about it, an increase of one penny corresponding with D-day in February would have been an appropriate increase to have allowed. But the Post Office was determined that it would plan for an increase in January. I did not consider it to be appropriate and the Minister, when he inherited the plans which the Post Office had put to me—they were on his desk when he came into office—instructed the Post Office that the increases would not be introduced in January. After advice from the Post Office Users' Council, he instructed the Post Office that they would come on D-day, which corresponded with my original thoughts on the subject.
It was not essential, bearing in mind that the issue of stamps was for February, not January, for the stamps to be printed


before June. When the Post Office asked me whether it could print the stamps, I told it that it would not be appropriate for it to print the stamps until a clear decision had been made as to the rate of the increase. No decision had been made at all. It was after this that Lord Hall came to see me and told me that he had given instructions for the stamps to be printed. I instructed Lord Hall that he was not to have the stamps printed on any account until a Ministerial decision had been taken.
I am revealing this to the House because I think it helps to throw light on a rather delicate situation to which the House can well pay attention. It is not a unique occurrence in the relationships between a chairman and a Minister but something that happens from time to time. Indeed, every ex-Minister in the House can probably remember examples with other boards, when the chairman of the board and the board itself believed that it had a public duty to pursue a certain course while the Minister, bearing other public and political responsibilities in mind, had another course of action to propose. This is not an academic subject or a unique example; it is general to the whole problem of the relationship between a Minister and a board.

Mr. Chataway: The information given to me by the Post Office and I think also to the right hon. Member for Bristol, South-East (Mr. Benn) was that the order to print was in relation to the decimal stamps and that it was felt by the Post Office that it was necessary to embark on the printing of decimal stamps for the February date. Why, if the right hon. Gentleman had believed that a 2d. increase or its equivalent would not be accepted, did he not use his powers to stop the Post Office from printing when he knew it would involve a waste of money since Government approval would not be forthcoming?

Mr. Stonehouse: Because the order which the Post Office gave for printing took place very late in the day, very near to the election day, and it was then inappropriate for me to use the powers referred to. It would then have become a major political issue and it would have

been quite wrong for it to have come out in that way. The Minister is incorrectly advised about the date at which these stamps were to be used. The Post Office had it in mind to bring the increase into effect in January. If the increase were to be in February, there was no need for the stamps to be printed in June or before. Furthermore, there was no reason why the existing stock of stamps should not have been used, even after February, because it would have been possible to have an increase with the old stamps being used to make up the value of stamps required for postage. This could have been done for a few weeks while the new stamps were being produced.
In my judgment as Minister at the time, it was quite unnecessary for the Post Office to proceed with the printing of stamps before a clear decision had been taken. I give this as an example of the sort of tensions which can exist between a Minister and a chairman. I do not think that it is the first time, and it certainly will not be the last time, that such frictions occur. I give it as an example of Lord Hall's action. I believe that he was intemperate in the way he behaved. He had the full Board behind him—there is no doubt about that. It was a unanimous decision, but I believe that Lord Hall would have been better advised on that occasion to have gone to his Board and advised it that in his judgment it would be better to accept the Minister's advice and not to go to the printing of stamps as he was suggesting.
This sort of action was very genuine on Lord Hall's part, because he was anxious to show the commercial independence of the Post Office and to prove to his Board, his executives and all the staff that the umbilical cord had been cut, that the old G.P.O. was dead and that the Post Office Corporation was alive. I believe that Lord Hall was trying in those months to demonstrate that in order to create a new morale for the new Corporation, to give it a new momentum. Although I condemn Lord Hall for his individual action on that occasion, and I may have the majority of the House with me in that, I do not think that we can blame him for his sincere objectives. He was sincere in what he was trying to achieve.
If the Minister had tried to talk to Lord Hall and to advise him about the way in which he should conduct himself, I believe that Lord Hall would have been tamed by the responsibilty of the job and that it would have been possible for him to become an ideal co-ordinating Chairman of that Board. Instead of giving himself time and questioning the Chairman of the Post Office Corporation, after only a few months of Conservative administration the Minister has rushed in to dismiss the Chairman of that Corporation, just as it was beginning to get into its stride.
This afternoon it was revealed that the Minister had no consultations with any executives in the Post Office itself and no consultations with the Board. This is interesting. Whom did the Minister consult? [An HON. MEMBER: "The Prime Minister."] The Minister did not consult anybody in the Post Office. Did he consult industrialists? I hope that the Minister who is to reply will give us an answer to this question. If the Minister did not consult anybody inside the Post Office, whom did he consult? We expect an answer from him tonight, because if he did not consult anybody he is relying on his own judgment and that of his Ministerial colleagues, including the Prime Minister.
How can the Prime Minister or the Minister, on the basis of two or three meetings, including social encounters, justifiably come to the conclusion that Lord Hall is not fit for the job? They cannot possibly tell the House that they of all people have a divine insight into the qualities of a man like Lord Hall, a man who can inspire the men on the shop floor and the men on the postal beat to come out, as they have, in their thousands tonight, to see us here, a man who has dedicated himself to the Post Office in a way which we certainly wanted to see from the Chairman, a man who was beginning to prove that it is possible for the Post Office Corporation to develop a new personality, a new morale, a new momentum, from that of the old G.P.O.
I was much impressed by the leading article in The Times on Saturday which said this about Lord Hall:
He is a popular man, particularly with the unions. His general competence is not in question.

Apparently the Minister begs to disagree. Most people in the country would agree with The Times and will not agree with the Minister. [Interruption.] In all fairness, I have given the House an example of Lord Hall's anxiety to prove the commercial independence of the Post Office. I have done that because I believe that the House wants to debate this issue with some intelligence and some sensibility. I believe that the House wants to debate the real issues and not engage in a mere political slanging match. We want to get some value out of the debate. I want Ministers today and Ministers in future Administrations to understand some of the problems involved. This is why I have been frank with the House. I have said that, although I disagreed with what Lord Hall did on a particular occasion—I personally suffered from it—I believe that Lord Hall's intentions were thoroughly genuine; and I believe that it is his intentions which we must understand.
I believe that there are many other examples in which chairmen of public corporations have taken actions of which the Ministers did not approve but which have been shown to be in the interests of the corporations concerned. To judge from the Press, the Ministers involved are very concerned about Lord Robens and some of his actions during the past few weeks. Perhaps in another context they would care to discuss that.
I continue with the quotation from The Times:
But it is fair to point out that his selection for this particular job was a gamble taken by a Labour Minister. Lord Hall's credentials for the post were those of a Labour peer with experience in the City: but it was not experience that especially fitted him for running the Post Office, of which he had no particular knowledge—as he explained with commendable frankness on his appointment.
I accept that the appointment was a gamble. The appointment of every chairman of a nationalised industry is a gamble, because that individual has never had to accept a job of comparable importance in that field. I do not believe that this gamble failed. I believe that Lord Hall was able to match up to the job to which he was appointed. I have admitted that he was indiscreet in his relations with Ministers. I believe that he also tried to go far too quickly and that this upset quite a lot of people. I believe, as The Times believes, in Lord Hall's


general competence and I believe that he would have been able to become a good Chairman of the Post Office Corporation if the Minister had had the patience to deal with him.
Instead of having patience, the Minister has rushed in to dismiss Lord Hall. I do not believe that Lord Hall has been dismissed because of his so-called incompetence, although the Minister again today has tried this general smear to which we are becoming accustomed from him.
I unreservedly withdraw any imputation that I may have made on the programme "Twenty-four Hours" last Wednesday, because I value and respect the work that the Civil Service does, not only in the Ministries with which I was directly connected but in the many others. However, I must say that last Wednesday—probably it was a direct leak from the Minister himself—there were political correspondents writing in the evening newspapers to the effect that the general feeling in the Ministry was that Lord Hall was incompetent and unable to do the job. I believe that it is this sort of smear around Fleet Street that has done a great deal of harm, not only to Lord Hall but also to the Minister.
I believe—in this I think that The Times is right—that there is no question about Lord Hall's general competence. Therefore, why is the Minister dismissing him? The Minister is dismissing him because he knows that in the future development of the Post Office strategy he will have conflicts with the existing Post Office Corporation. The Minister has been frank enough to admit today that the telecommunications business will be subject to the general philosophy of the Conservative Party and that the profitable parts of it will be hived off.

Mr. Chataway: I have said nothing of the kind. I am sure that the right hon. Gentleman would not want to misrepresent me.

Mr. Stonehouse: The Minister said that the policy that he would follow in relation to the Post Office would be the Government's policy in relation to the nationalised industries. What are we seeing in this respect? In the case of the Coal Board, hiving off is taking place

in all directions. We are seeing an example of this in B.O.A.C. and B.E.A. I remember what the Conservative official spokesman said in the Standing Committee on the Post Office Bill. In that Committee stage, morning after morning, the Conservative spokesman was arguing for denationalisation of essential parts of the Post Office. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), now Under-Secretary of State for Trade and Industry, spent many interesting speeches developing the philosophy of the Conservative Party in relation to the Post Office. It was clear what they had in mind. It may be that the Minister has not yet formulated all his plans or that Ministers collectively have not yet made their decisions. But it is his intention, as he has admitted this afternoon, to apply to the Post Office the philosophy of the Conservative Government, which means hiving off profitable aspects of that business.
The Minister knows that if he had tried to do that with Lord Hall as Chairman, he would have had a fight on his hands. Lord Hall's comments about his dismissal have been a bit eccentric, I agree with the Minister in that, but one of Lord Hall's phrases was that the Minister would have cut Giro over his dead body. That illustrates how Lord Hall felt about it. There would have been a running battle over the years between the Minister and Lord Hall if he had remained.
I believe that Lord Hall has not been got rid of because of his lack of competence but because the Minister wants to inject into the Post Office a feeling that it has to do automatically what the Government say about the political future, and the aim is to avoid the political rows which would have occurred had Lord Hall remained.
The Minister not only intends to cut Giro within a very short time but intends to allow within a very short time private enterprise to break the monopoly of the Post Office in supplying telephones to individual subscribers. I believe that he is planning the devolution of the telecommunications network in such a way as to allow private enterprise to take over parts of it. These matters are in his mind, as is the possible denationalisation of the National Data Processing Service, which is already showing what it can do in the computer-hiring field.
The Minister knows that with Lord Hall there it would be a tough political job. He is trying to find an easy political ride for these operations by sacrificing the chairman of a public corporation. I do not dispute the right of the Minister to dismiss the Chairman. I agree with the Minister that it is his duty to ask the Chairman to resign if he feels that the Chairman in that position cannot carry through the political programme of the Government who have just won the election.
Therefore, I am not arguing about the actual dismissal of Lord Hall but about the way in which the Minister has done it. He should have come clean with Lord Hall and told him about his future plans and told him that it would be better in the long-term interests of the Post Office for Lord Hall, who had pronounced ideas of the functions of the Post Office, to retire. In that way the Minister's action would have been accepted. But to take action in the way in which he did, without giving reasons, and to malign a public servant who had at great sacrifice taken on a job only 14 months ago, is reprehensible conduct indeed.

8.32 p.m.

Mr. Ivor Stanbrook: I am grateful for this opportunity to make my first speech in the Chamber in this debate. This Motion reflects an attitude which is at the root of the country's problems today. In deference to custom, however, I must first say that I represent the constituency of Orpington, which gave itself a special place in the political vocabulary by electing my predecessor, Mr. Lubbock, in 1962. An industrious, conscientious Member of the House, he made skilful use of his position as spokesman for a small party on a variety of subjects.
My constituency is one of the largest in Greater London, being on its fringe and embracing light industry as well as rural areas, and including a belt of suburban residential property. The population consists to a great extent of comparatively young people who find their living in the City and who are endowed with that desire to get on in life which is the source of the vitality of the British people. Whatever the significance of my predecessor's tenure of this Parliamentary seat, about the meaning of my victory at the recent election there can

be no doubt. The people of Orpington, like most of the people of the country, wanted a Conservative Government. I am proud to have assisted them to obtain one.
I am profoundly depressed by the Motion. It was tabled after my right hon. Friend had explicitly assured the House that no major policy differences affected his decision to dismiss Lord Hall. Lord Hall has not denied this, yet it seems that those who support the Motion are not prepared to accept my right hon. Friend's word for it. Why should they thus impugn the Minister's integrity? They have no justification for doing so. Nobody can seriously suggest that a Minister is not entitled to dismiss the head of a statutory corporation if he finds that he is not up to his job. The right hon. Member for Wednesbury (Mr. Stone-house) explicitly agreed with that proposition. But, equally, no one can pretend that there was not a great deal wrong with the Post Office Corporation. To have allowed it to continue with what the Minister considered to be inadequate leadership would have been incompetence on his part.
So it seems to me that this Motion is almost completely bogus and that its purpose is only to serve the party game. That is what depresses me, as does the patent insincerity of so many of the words spoken in this Chamber. Last week we had the spectacle of decent and honourable Members being howled down when they were endeavouring to explain their points of view. A right hon. Lady vibrated with passion as she made a speech which the whole country knows to have been the reverse in spirit of that which she expressed when her party was in power. Individual Members bellowed across the Chamber as if they were at a prize fight. Bogus points of order proliferated. This Motion is the continuation of those episodes.
If we behave in that way, how can we expect to exert a good influence on the country? Members of this House are not corrupt. Certainly they are not in it for the money. By and large they are motivated by high ideals and the desire to serve their fellow men. Why trade in assertions of mean and base motives? They are quite untrue. The country knows them to be untrue. But they are profoundly damaging because of the place


in which they are uttered. They denigrate this House and the democratic process at a time when our traditional code of moral values is everywhere under attack.
We Members of this honourable House can show by our example and the laws that we make that Britain may recover both its spiritual strength and its economic prosperity. But we cannot do that if we use mindless and cheap abuse to each other. I do not believe the sentiment expressed in the lines added by Samuel Johnson to Goldsmith's "Traveller":
How small, of all that human hearts endure,
That part which laws or kings can cause or cure!
Those are the words of a cynic. We can do better than that if only we have more respect for each other.
Perhaps I ought to apologise for speaking so freely and possibly irreverently in a maiden speech—

Mr. S. O. Davies: Hear, hear.

Mr. Stanbrook: It may be that a new Member sees the absurdity and danger in this sort of Motion more keenly than those accustomed to political humbug in this Chamber. I hope that I have been, if not uncontroversial, at least reasonably impartial. All that I wish to add is that this country sees hope, for the first time in many years, in the robust attitude adopted by my right hon. Friend the Prime Minister and his colleagues towards this and other problems of government. They have the trust and support of the British people, and they deserve to succeed.

8.39 p.m.

Mr. Charles R. Morris: It is with pleasure that I follow the hon. Member for Orpington (Mr. Stanbrook) and congratulate him on his first speech in the Chamber. It was hardly a non-controversial speech. I was hoping that at some juncture he might say something about the Motion which is before the House. I look forward on future occasions, however, to hearing his further contributions.
This has been a wholly remarkable debate. It has been remarkable for an insensitive—some may think arrogant—

speech by the Minister of Posts and Telecommunications. I hope that he will not live to regret that speech as it affects his area of political responsibility.
If the Minister's speech was remarkable, the manner in which he has carried out his Ministerial responsibilities during the past few weeks has been less than remarkable. He has established a precedent without parallel, a phenomenon in Post Office industrial relations. At this juncture, I ought properly to declare an interest as a member of the Union of Post Office Workers. Having said that, however, I feel that the way in which the Minister has carried out his responsibilities in recent weeks has had, and will have, a profound impact on the morale of Post Office workers.
The peremptory—some may think politically shabby—way in which the Chairman of the Post Office Corporation was dismissed was remarkable in so far is it provoked a spontaneous reaction from 30,000 to 50,000 members of the Post Office staff. There was no question of organisation by the unions concerned.
To those who suggest that it was politically motivated, I would say that I had the experience of going outside this Chamber, immediately outside St. Stephen's entrance, last Wednesday afternoon and joining the National Chairman of the Union of Post Office Workers in encouraging postal workers to return to their jobs. It is probably humorous to recall that as I finished delivering my few words, a kind policeman came along and asked whether I realised that I was at risk of being arrested for addressing a public meeting within a mile of the Palace of Westminster.
Notwithstanding that, there was evidence that this was an immediate, spontaneous reaction from the Post Office workers throughout the nation. We had the Post Office telephonists, Post Office counter clerks, Post Office administrative clerks and postmen off their beats coming to identify themselves with the views which had been expressed by their chairman. As other hon. Members have indicated, it was a remarkable demonstration.
One wonders why the enlightened, decent, industrially peaceful staff of the Post Office reacted in that way. It casts little credit on the Minister


that he in no way anticipated his staff's reaction to his decision. I have heard that the Minister had arranged to travel north and announce his decision in a Press hand-out at 5.30. What a remarkable manner of proceeding. With the benefit of hindsight, the right hon. Gentleman said this afternoon that his decision inevitably gave rise to controversy. There was no evidence that that was what he felt when we was arranging to travel north and proposing to announce his decision by means of a Press hand-out at 5.30.
One is obliged to question whether the Minister realised that ever since the advent of the public corporation, Post Office staff have felt that their conditions, their security of tenure and the very future of their industry are threatened. I wonder whether the Minister realised the impact which his speech at the Conservative Party annual conference had on the Post Office staff. That was a speech calculated to inflame, and raise the anxieties of, those who have given so much by way of service and loyalty both to the Post Office and to the community generally.
One may well ask, why was the staff of the Post Office anxious about the Minister's speech at the annual conference of the Conservative Party? One needs only to refer to the verbatim report to see the real roots of the anxieties of the Post Office staff. There was a time when Postmasters-General were looked upon as the staff's spokesmen and defenders when the Post Office and its staff were under attack, but what did we have in that debate? The Motion which was before the conference was highly critical of the Post Office in a number of directions. One delegate said:
It is, therefore, time to break this monopoly".
He was referring to the Post Office monopoly generally: "Break this monopoly".
One might have thought that the Minister, in replying to that sort of comment in closing a debate which was critical of the Post Office and its staff, might have sought to defend the Post Office and its staff for whom he had political responsibility, but what did the Minister say in his reply? He said:
This is something we have very much in mind

He then went on at a later stage of his speech to say:
Some harsh things have been said about the Post Office and some harsh things have been said in this debate. Some of them are entirely justified".
The Minister has been in office now a number of months, but I have never heard him identify those areas of his administration about which harsh criticisms are justified. He went on to say in reply to that debate—

Mr. Chataway: Since the hon. Member has criticised me for not saying anything in favour of the Post Office, surely he will go on reading—from the point at which he was quoting?

Mr. Morris: I will read the whole of the right hon. Gentleman's contribution—[HON. MEMBERS: "Oh, no."]—if that should be the wish of the House, but I am mindful of the speeches which I hope my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) and my other parliamentary colleagues wish to make. I want to make one quotation, though. The Minister at a later juncture in that same speech said about the Post Office:
There is plenty to be alarmed about".
He said that one is justified in saying some harsh things about the Post Office and that there is plenty in the Post Office to be alarmed about, but not since that conference, nor during his time as Minister so far, has he identified those areas of which such criticism can be made. If one starts making that sort of speech one gives rise to anxieties amongst the Post Office staff, and it will have an effect on the morale of the Post Office staff.

Mr. John Nott: The hon. Member is a passionate advocate for the cause, and if he would form a friendly society or trades union on behalf of chairmen I would welcome the opportunity of becoming the first member, but I cannot conceive how the hon. Gentleman can wax so passionate about the whole question of the removal from office of a chairman of a company or public corporation because he is unfit.

Mr. Morris: I can only suggest that the hon. Member perhaps has not followed as closely as I would have wished what I have said because the sacking of


the Chairman of the Post Office Corporation, the decision itself, was taken against a background of growing anxiety amongst Post Office staff which had been there ever since the advent of the public corporation. When the Minister says he dismissed the Chairman of the Post Office Corporation, he was exercising a power which no previous Postmaster-General ever had; as the administrative head concerned, no Postmaster-General previously had legislative power to dismiss a Director-General of the Post Office, because the Director-General of the Post Office hitherto has been a civil servant.
When the Post Office staff saw a Minister exercising his responsibilities in such a peremptory fashion and after such a short period in office, as I said, they started to have doubts about his intentions towards their industry, and that is the justification for the anxiety of the staff. That is what has had such an impact on the morale of the Post Office staff.
The Minister has said that, so far as the decision is concerned, he has had no disagreement with the departing Chairman of the Post Office Corporation. Did he endorse the policy points which have been made by the Chairman, Lord Hall, recently? Did he endorse the point which was made by the Chairman in May of this year at the conference of the U.P.W. when he said:
We see a future free of all redundancies, we see a future of good pay and opportunity. …We are not now at the whim of any succeeding Chancellor of the Exchequer. We must get to know each other; we are on our own and we are responsible for the future.
Does the Minister accept that as an industry we are not now at the whim of the Chancellor of the Exchequer? Does he accept the view of Lord Hall when he was speaking to the European Postal, Telephone and Telegraph Administrations and suggested that there was £2,000 million of Government business that could be transferred to the Post Office Giro? Does he endorse the Chairman's policy of devolution of administrative responsibility to the regions? Does he endorse the Chairman's view with regard to the development of the computer service in the Post Office? These are the

aspects of this business which are causing anxiety.
We are discussing a very major industry, an industry with a turnover of £8,000 million and employing 2 per cent. of the working population of this country. Post Office staff generally are worthy of better than they have received so far from the present Minister of Posts and Telecommunications.

8.53 p.m.

Mr. Stratton Mills: I want to get back to the striking speech of the right hon. Member for Wednesbury (Mr. Stonehouse) which was interesting, frank and revealing. If the right hon. Gentleman, who I regret is not in his place at the moment, had been able to see the faces on his own Front Bench he would have realised how effectively he had totally demolished this censure Motion. He made perfectly clear the extent to which he suffered from misunderstandings with Lord Hall. He gave details of what I can only describe as the fantastic story of the stamps, and the relationship between a Minister and the head of a nationalised industry. He revealed very graphically to the House the nature of the problem with which my right hon. Friend has had to deal. No one who has listened to the debate this evening could be other than clear in his mind that the right hon. Member for Wednesbury is no longer a fervent admirer of Lord Hall.

Mr. William Molloy: rose—

Mr. Stratton Mills: I cannot give way, time is short. I am not criticising the right hon. Gentleman for the appointment, but the appointment was his, and that he should speak in such terms of his appointee is particularly revealing.
I come to this debate to dicuss the sacking of Lord Hall with a certain amount of sadness. It is always sad to see a public servant, the head of a giant corporation, lose his job. I was involved throughout the various stages of the Post Office Bill which created the new Post Office Corporation. It will be remembered how we on this side of the House constantly emphasised the key importance of having the right man as chairman of the new Corporation, and how


we constantly set forth our ideas of the kind of person who should have this job.
There were two conceptions of the rôle of chairman. The first conception was that of the right hon. Gentleman; he spoke of a chairman or co-ordinator, and of the chairman holding the ring. The other conception was of a Lord Beeching-type chairman, someone like Sir John Wall who had been appointed by the right hon. Member for Bristol, South-East (Mr. Benn). The big debate was about which type of chairman should be appointed. I believe that the right hon. Member for Wednesbury sounded out a considerable number of people to see whether they would be prepared to act as Chairman of the Post Office Corporation and only when he could not get the Beeching-type chairman did he eventually fall back on the co-ordinator, holding-the-ring, type chairman. As he said, such appointments are always a bit of a gamble.
When Lord Hall was appointed there were no complaints from the Tory side of the House that he was a Socialist, although there were considerable doubts whether Lord Hall was the right man for the job in that he had experience in finance but not in running large industrial concerns. No one on the Tory side of the House questioned this aspect, as that would have been extremely damaging to a chairman who was coming fresh to a new Corporation. When the appointment was announced, I consulted the Directory of Directors to find out what industrial and managerial experience Lord Hall had and whether he was suitable to head a giant Corporation employing more than 400,000 people, the largest unit in British industry. Nothing is listed in the Directory of Directors about his qualifications. That speaks for itself. Nevertheless, in Opposition we wished Lord Hall well, but it has become clear—and my right hon. Friend in his excellent speech made it clear—that Lord Hall was unsuited for this post.
It is sad that this censure Motion has forced my right hon. Friend to say more than originally he would have wished as to the unsuitability of Lord Hall. Anybody who has read the Press accounts of his interviews since his dismissal or his interviews on televisison must have had their views on this subject reinforced. I cannot help reminding the House of a number of items during his time as Chairman

which made me wonder whether he was the right man for the position.
The idea of giving tea to the "posties", which would hold up their schedule very considerably, is well-meaning but not very practical. Again, he seemed to be very much out of touch with the Post Office in not knowing about the change-over to a new type of listing in the telephone directory. Then there was the rather odd advertisement introducing himself to the public at a cost of some £30,000, which struck me as a little peculiar. There was then the setting up of the "thinkers committee" presided over by Lord Snow at a cost of £20,000, which again struck me as an idea that was not exactly out of the top ranks of British management.
We had a particularly revealing insight, which equally destroyed the case of right hon. Gentlemen opposite, in the form of a fascinating article in the Daily Mirror on 27th November by Mr. Woodrow Wyatt, who is well known to us in this House, and who is possibly still a Socialist. In his opening sentence he said:
The remarkable thing about Lord Hall is not that he was sacked but that he was ever appointed. He had no particularly obvious qualifications for the job. Certainly he was worthily connected with a number of financial institutions, but he had never run a commercial undertaking with a large number of employees.
He went on to list what he described as a number of "fatuous statements" by Lord Hall.
However, I do not wish to add further to that. All I would say is that the evidence my right hon. Friend has given, and the evidence Lord Hall himself unwittingly has given to the public, has made it very clear indeed that this appointment was a mistake. I am sure that it must have been unpleasant for my right hon. Friend in the early days of his new office to have to make a decision to sack the Chairman. But I have no doubt that he took that decision because he felt it to be in the interests both of the Post Office and of the public to have the best possible man for the job, and I will support my right hon. Friend in the Lobby tonight.

9.3 p.m.

Mr. John Golding: I have tonight attended a meeting at Central Hall, the like of which I have never seen before. Today, as over the


last week, thousands of Post Office engineers and other Post Office employees have come to London in great numbers to add their protests at the sacking of Lord Hall. It is clear from the meeting tonight that they support this censure Motion to a man.
Nothing has been said in the House today to persuade them that there was justification in the dismissal of the Chairman. Nothing that has been said corresponds with the experience of those men or their trade union leaders over the last 14 months. We have heard it said in this debate that this man came to the job with financial experience only, and his directorships have been mentioned. One interesting thing that has emerged in the last week is that it is not the financial expertise for which he is now being praised. It is his leadership of men. When we realise that the Post Office is our biggest employer, employing over 400,000 men, to say that the Chairman was able to command the complete confidence of those men is something great in his support.
The men are upset not only with what they see as a shabby political sacking—again, we have heard nothing which tends to refute this—they see it as a threat to their own working lives. They regard it as the act of a man for whom the Post Office is merely an interlude in a political career—either a stepping stone or a greasy pole in his parliamentary life. For them the situation is quite different. Most of them will spend the rest of their working lives in the Post Office. Their whole future is bound up in its welfare. This is why they are prepared to come to London and to stand literally for hours in the queue to lobby their Members of Parliament. This is why they feel so strongly about this issue this week. They want the Post Office to serve the public interest and they want to play an active part in its development.
The men know the faults better than most. Indeed, in the 1950s and early 1960s the unions attacked right hon. and hon. Gentlemen opposite for neglecting the Post Office and for cuts in investment. It was the unions, not the Telephone Users' Association, which later came to us for assistance and advice. The unions led the spearhead of the attack on the decline of the Post Office in the 1950s and early 1960s.
We know the failings, the shortcomings, of the Post Office. But we also recognise its strengths. We realise that a £61 million surplus on telecommunications last year is not a Rolls-Royce situation. It is interesting that the Minister at the Dispatch Box can recite glibly the loss on the postal service, but when we ask him to state the profit and the achievement on telecommunications he is unable to answer.
It has also been noticeable that the Minister has been able to quote to the nearest decimal point the decline in productivity on the postal side; but he has not recognised that through the acceptance of change in working practices since 1964 there have been substantial increases in labour productivity on the telecommunications side. It is high time that the Minister made a public acknowledgement of the strength of the telecommunications service as readily as he denigrates the postal service.
Unfortunately, others, apart from the men, have seen that the Post Office telecommunications service will become a commercial goldmine. The private manufacturers have seen this and the hiving-off lobby has been at work. It is significant that the large contribution to the Tory Party funds from Plessey has come since large surpluses were accumulated on telecommunications account. No doubt Plessey is waiting for its return. We believe that part of that return lies in the sacking of Lord Hall.
At the Tory Party conference, the Minister made a foolish speech, designed, no doubt, to get him the cheers of the Tory ladies who were there. But it produced insecurity in the Post Office from top to bottom.

Mr. Leslie Spriggs: Can my hon. Friend assure us that what he says about Plessey's can be proved? Can he give the figures?

Mr. Golding: Certainly. Plessey's has put sums of the order of £20,000 a year into Tory Party funds and has put money into other organisations designed to fight public enterprise.

Mr. Spriggs: Disgraceful.

Mr. Golding: The right hon. Gentleman's speech at the Tory Party conference included one suggestion which has not been really probed—the addition of


industrialists to the Board of the Post Office and making it larger thereby. Did Lord Hall agree to an increase in size? Did he realise that to add new members to it would change the policy bias of the Board? Were any discussions undertaken about people whom the Minister said the Chairman would have to place on the Board?

Mr. Chataway: There are four vacancies on the Board so it would not have been a question of increasing the size. That was never a matter for contention.

Mr. Golding: The right hon. Gentleman says there is no intention of increasing the size, but there have been four vacancies since the creation of the Board. That would have meant increasing the size of the present Board. This is the sort of answer one gets from that Front Bench. The implication was that there were vacancies because people had left. In fact, there were vacancies only in the sense that the Act provides for a larger Board than the size set up.
This agreement to look at hiving off has upset many people working in telecommunications, who have seen not only this profitability built up by public investment and by the hard work of Post Office engineers, but also the inefficiencies of Plessey's, of G.E.C.-A.E.I., and of Standard's. In every town in the country, Post Office engineers are having to tell subscribers that they cannot have telephones because the private manufacturers are months behind in their promised delivery dates. Tonight's statement by the Minister on hiving off is not going to allay the fears. When they come to read HANSARD, I think that the men in the field will feel even more insecure than ever.
The strength of Lord Hall was that he had removed anxiety from the staff. I want to make this point because I do not think that it will be made later. He took over a very difficult situation. Our men were feeling very insecure following the fact that they were no longer in the Civil Service. There was a great deal of anxiety as to what was going to happen in the Post Office as a public corporation. There could have been grave industrial unrest. There could have been great antagonism to the change. Even though Lord Hall came to the Corporation without industrial experience and with only

financial experience, he allayed the anxieties and fears of the staff—so much so that they are now prepared to stand in the rain waiting to get in here to lobby on his behalf. That was a tremendous achievement of his.

Mr. F. P. Crowder: Hindsight is something that we do not have when we appoint people, but would the hon. Member or any other member of his party ever dream of appointing Lord Hall again?

Mr. Golding: Of course we would appoint Lord Hall again, and, having had the experience of working in the same industry as he for 14 months, of course I am opposed to his dismissal. The interesting thing is that although men are prepared to battle for Lord Hall, if the Minister were removed from office they would cheer. That is not a satisfactory situation for a Minister to be in. He is the first Minister of Posts and Telecommunications of whom that could be said. I hope that he improves, because it is not for the good of our industry to have a political head who is discredited. We want a Minister to whom, even though the men disagree with him, we can look with respect.
If that were the situation there would not be men coming from all parts of the country—and I can tell the right hon. Gentleman that in the Lobbies there have been Tories, Liberals, members of the Labour Party and Communists—to support Lord Hall and back us in our Motion of censure.

9.16 p.m.

Mr. Alan Green: I cannot follow the hon. Member for Newcastle-under-Lyme (Mr. Golding) in all his speech because, unlike him, I have no direct connection with the Post Office. I cannot assert or refute, of my own knowledge, the hon. Member's suggestion that all the protests that have been made were totally spontaneous and in no sense thought up by anybody else. But that point does not have all that much to do with the Motion of censure.
Before I turn to the Motion I must say how fascinated I was with what was said by the right hon. Member for Wednesbury (Mr. Stonehouse) about the position to which he appointed Lord Hall. I was not in the last Parliament and


therefore did not hear all the considerations referred to by one of my hon. Friends. The right hon. Gentleman will therefore correct me if I am wrong. As I understand it, however, Lord Hall was not appointed as chief executive of the Post Office. He was paid as such, but he was not appointed to that post.

Mr. Stonehouse: If the hon. Member will look back at the records, he will notice that when the appointments were announced Lord Hall was appointed as Chairman and Mr. Ryland as Deputy Chairman and Chief Executive. That puts the question beyond doubt.

Mr. Green: Of course I accept what the right hon. Gentleman says. Lord Hall was appointed as Chairman but not as Chief Executive. He was the co-ordinating Chairman, whatever that may mean. He was a non-executive Chairman. I admit that I have only a limited industrial experience, but it seems strange to me that on being dismissed the non-executive Chairman should provoke a vast, spontaneous strike. I cannot imagine what the answer is.
The Motion is couched as a Motion of censure on the immediate past performance of my right hon. Friend the Minister. It is based on what has happened up to this moment. I have not heard anything said by hon. Members opposite tonight—and I have been here all the time except for two minutes—about suspicion and doubt as to what might happen in the future. This is the issue on which the debate has been erected. I suggest strongly to hon. Gentlemen opposite that if there is one way of damaging the Post Office in future it is constantly to arouse fears and suspicions of what might happen to it—

Mr. Molloy: Tell us what will happen.

Mr. Green: Again, from my very limited industrial experience—

Mr. Molloy: Do not keep demonstrating it.

Mr. Green: —I believe that it is one of the worst ways of putting confidence into an industry which sadly needs it. I agree with many of the things said by hon. Members opposite. I do not want to use hyperbole or great, flashing phrases, because that would not help the industry,

but it is fair to say that, before the General Election and since—let us put it very mildly—the countenance of the Post Office has not shone brightly to the general public. Let us put it no higher than that. We can all agree on that—

Mr. Molloy: No, we cannot.

Mr. Green: If one or two hon. Gentlemen cannot agree on it, I suggest that they go back and ask their constituents whether what I have said is not a reasonable understatement of the truth.

Mr. Molloy: rose—

Mr. Green: No, I will not give way.

Mr. Molloy: Will the hon. Gentleman give way?

Mr. Speaker: Order. The hon. Gentleman has not given way.

Mr. Green: I do not think that that was an understatement of the case. It follows that anything that we do in this place which has the unfortunate, but probably unintended, effect of further damaging this industry is a disservice to it. I suggest strongly to the House that the Motion, couched in this very narrow sense, hinged on the dismissal of one man, is a Motion of that kind which leads to a grave succession of doubts and fears about what will happen in this industry and is anything but a service to the industry.
I do not think that it has made the job of making the Post Office, not simply better or more efficient—although I sincerely hope that that it what it will become—but more acceptable to a public, many of whom now doubt it. It will make that job of pulling it together and presenting a better image to the public, as I want it to have, a good deal more difficult than it would have been if this Motion had never been tabled.
What does it finally come to? No one disputes, I understand, with possibly one exception, the right of the Minister to dismiss Lord Hall. No one is saying that such a man gets annointed with holy oil, becomes a sort of lay Dean of Canterbury. All that is in question is whether the Minister should or should not have done this particular act. No proof has been advanced from hon. Members opposite that he should not have done it—only vague fears and suspicions which


already are very damaging to the future of the industry which they and I wish to defend.

9.23 p.m.

Mr. Anthony Wedgwood Benn: My first job is to congratulate the hon. Member for Orpington (Mr. Stanbrook) on his maiden speech. He will not misunderstand me, I hope, if I say that it was the most censorious maiden that we have had in the House. When he reads it in HANSARD, I think that he will share that judgment. I only hope that he gets to like us more the longer he is with us, because he said some sharp things about both sides of the House and the nature of debate. I would ask him not to assume too readily that the motives of those with whom he disagrees are necessarily dishonourable, as I hope to be able to show tonight.
The Minister made much of his surprise that we did not criticise the right of a Minister to change the chairman of a nationalised industry, but he knows, as every hon. Member knows, that all Governments have to have the right to change the chairmen of nationalised industries. He knows, because I told him last week, that I had changed the Chairman of Short's. Like him, I found it a personally painful experience to call a man in—particularly when there had been a leak, which did not come from me—and say, as in that case, that after six years, I would like to make a change, and ask him whether he would stay on until we found a successor. At any rate there is no difference between us on that score.
But, having dismissed a chairman, a Minister is responsible for his decision, and this debate is about the Minister's accountability to the House, which is the second stage of the exercise of his power. Since Lord Hall has chosen today in the Financial Times, and I am glad that he has, to say that he makes no more of this on a personal plane, it allows us to raise one or two points on his behalf.
The Minister is right to say that there is no precedent for giving reasons to the House, but I have never heard of a case in which the man himself was not given reasons. There is all the difference in the world between telling the House, "I have to exercise my judgment, this is my judgment, I stand or fall by it," and

sacking a man, giving him 24 hours' notice to get out, totally, without giving him a reason.
The House was not told more than was normal in the circumstances, but the Minister saw the Post Office Union. We made inquiries of that union as to what had been said at that meeting and received a letter, which I have the authority of Mr. Tom Jackson to read, addressed to my right hon. Friend the Leader of the Opposition. In view of the importance of in no way distorting what the letter says, I propose to read it in full. It reads:
The following quotation is not to be regarded as being entirely accurate. It has been pieced together from notes taken at the meeting by myself and the Editor of the Union's Journal. Chataway was being pressed hard by the Executive Council to give reasons why Hall had been sacked. He said something like this:
There are two possible explanations why a Chairman should be sacked. The first of these was a disagreement about policy in that the Government wanted to do something with which the Chairman disagreed. This was not the reason, for everyone knows in the light of the statements issued by myself and Lord Hall, that no such disagreement has taken place.
That confirms what the Minister said to the House:
The second reason, which was the reason, was that I believe that Lord Hall is not the best Chairman for the Post Office Board and that the Post Office would be better managed with another chairman.
When pressed on this point, however, he said it would be wrong of him to say that Mr. X was incompetent, that he had done this or that and list 12 reasons. It would be equally wrong of him to say that somebody had said this or that to him about Mr. X.
He went on to say that he could not draw up a charge sheet which could be made public. Ministers had to take responsibility themselves of making these decisions.
And now I read the last paragraph:
This is the best that we can do. If it is not accurate, it is quite close to that which was said to us.
I believe that the Minister when talking to the union went further than he should have done, further than he went in speaking to the House, and that this was damaging to Lord Hall personally.
Our complaint—and I am making my case as reasonably as I can—is that Lord Hall has been badly treated, if no more, by insensitivity in relations between man


and man or in handling personal relations; that the Minister handled the matter unfairly and that Lord Hall has suffered. There are, of course, other examples I could give of chairmen of nationalised industries left within a few weeks of the end of their appointment without knowing whether they were to be reappointed or the industries knowing who their successors would be. So if there is—and there is in my argument—some element of criticism of the way in which the Minister treated Lord Hall, it is not just because of Lord Hall. It is because all must recognise that whoever assumes the responsibility for major decisions of this kind, although they may be dismissed must be treated with a greater degree of personal sensitivity than I believe the Minister showed in the case of Lord Hall.
I turn to another point which has emerged in the debate and also in some questions following the statement made after the dismissal. I refer to the remarks of the hon. Member for Preston, South (Mr. Green) in which he rather implied—and I think that it is a pity that he did—that in some way Lord Hall was responsible for the known failures occurring, as one would expect, in a very large organisation such as the Post Office, which deals with hundreds of millions of telephone calls and letters every year. There was an implication—indeed more than that—in what the hon. Gentleman said. He said that the image had not shone very brightly since the summer. That could only have been a reference to Lord Hall.

Mr. Green: With respect, I said "for many months and long before the General Election".

Mr. Benn: At least in this matter I shall have with me hon. and right hon. Gentlemen such as the right hon. Member for Wallasey (Mr. Marples) and the hon. Member for Totnes (Mr. Mawby) and others who at some time or another had some responsibility for Post Office matters. Everyone who has ever had any dealings with the Post Office probably knows its defects better than the general public but at the same time has had, by personal experience, a feeling of the dedication of the people who work in the Post Office and the very high degree of public responsibility they have.
The truth is that the problems of the Post Office are known to anyone who has troubled to study them. The posts are labour-intensive, and wages rise but cannot be offset by mechanisation. Telecommunications are capital intensive. There has been an explosive growth of demand and there is a failure to produce the equipment on time. The Post Office was for many years under-priced and was subsidising the businesses that used it and for many years there was under-investment.
May I say candidly to the House that the responsibility for the failures of the Post Office rests fairly and squarely in this Chamber and nowhere else. Both governments, both parties at the time when the Post Office was run as a Government Department, tolerated Treasury control, political Ministers, and parliamentary accountability that was absolutely incompatible with efficient operation.
We cannot escape the fact that Lord Hall was the first chairman—and this was the point—right from the days when the Post Office was established, who was free from political control. I will not weary the House with this because it is history, but I will invite hon. Members who are wondering why this has caused grave concern to read the memoirs of Rowland Hill, or the speeches of Austen Chamberlain or the report of the McDonnell Commission or the Select Committee Report on the telephone services, or the memoirs of Clem Attlee or Reginald Bevins or articles by the right hon. Member for Wallasey.
Every man who has ever held the office of Postmaster-General has on his retirement emphasised that it is not possible to run an efficient public service when there is a political Minister on his way up or down, passing through the Post Office, with Treasury control and Parliamentary Questions, preventing the office from operating efficiently.
This is where I come to my second charge of insensitivity against the Minister. Lord Hall had been there for 14 months. I did not appoint him, and I listened with as much interest as did anyone else to my right hon. Friend the Member for Wednesbury (Mr. Stone-house), who did appoint him. I would only say that, for the Post Office, whatever his personal merits or demerits may be—and no one is perfect—Lord Hall


represented the realisation of a dream that went back to Rowland Hill and the chance to develop the service free from the political control of Ministers. [Laughter.] That is why, when the dismissal of Lord Hall was so peremptorily announced, the Post Office felt that the whole of its history was being set back.
Hon. Members may laugh; I do not mind. I only say that anyone who knows the Post Office loves it, and anyone who knows it, also knows that it has been the ambition of people on both sides of the House for many years to liberate it from the very action that the Minister appears to have taken again, namely just treating the Chairman as if he were part of another Cabinet reshuffle. Many Ministers are sacked by a Prime Minister for no very clear reason. Read what Lord Hill said about his dismissal in the famous massacre—sent back to the office with no time to say good-bye because the news had leaked and it was to be on the one o'clock news.
For politicians and Ministers who live in this dangerous world, that is an experience we may all have. But when a Government business which, after full parliamentary debate, has become a corporation with a chairman who had identified himself with the staff whom he represented, finds that the chairman is treated as though he were part of a Cabinet reshuffle, that produces a spontaneous response. I have no doubt about that.
It is also true that the Minister, who, had he been appointed 15 months earlier, would have been Postmaster-General. goes to his office and finds that, instead of having pliant and respectful civil servants to deal with on matters of policy, there is a Chairman with all the sturdy qualities which my right hon. Friend the Member for Wednesbury attributed to Lord Hall. According to him, Lord Hall is a very difficult man to deal with, but that is why a chairman of a nationalised industry is appointed. Let no one think that it was easy to deal with Lord Robens or Lord Melchett. They were appointed to champion their "firm". Of course the Minister will find it difficult to deal with them, because the chairman of a public corporation wants to get his pricing right. That is why we had a little trouble in May about the stamps.
Of course the Minister wants to protect the wider interests and see that the policy of the Government is implemented. That is what is known in polite language as creative tension and in real life as very difficult relations between the Minister and the chairman of the board with whom he has to deal.
It would be a disaster if in place of Lord Hall the Minister appointed a man about whom it could be said that he was the Minister's puppet or a man standing in the same relationship to him as the Director-General of the Post Office stood in the days when there was a Post Office Department. I think—I hope that the right hon. Gentleman will not take this personally; it is not so meant—that his own Department is a Department that may be redundant in the new situation. There may well be a case for transferring broadcasting to the Leader of the House, who traditionally deals with high policy and the Post Office to the Department of Trade and Industry. The right hon. Gentleman should not, by changing the Chairman, try to set the clock back and in that way leave the Post Office in the position in which it now finds itself.
The doctrine of the Tory Party on this is, as one might perhaps have expected, impeccable. The Secretary of State for Trade and Industry in his famous speech, which has been so often quoted that there is not much left unquoted, at the Conservative Party conference spoke about the relationships between the Government and the nationalised industries. This is what the right hon. Gentleman said:
… Government must withdraw from its perpetual scrutiny and commentary upon the managements concerned—a process which undermines authority, constitutes a permanent alibi for inadequate performance and represents a serious inhibition to recruitment and the development of efficient management from within.
With that comment of the Secretary of State for Trade and Industry at the Conservative Party conference in relation to the handling of Ministers of the problems of nationalised industries I agree 100 per cent. That is why we turned the Post Office from a Government Department into a public corporation. That having been done, the dismissal of the first Chairman ever within 14 months without giving him reason was bound to produce the reaction that it did produce.
My right hon. and hon. Friends have raised a number of points of policy, one about Giro. I was glad to hear the Minister say that he had an open mind on Giro. I want to say nothing to make the situation more difficult because of uncertainty.
The Minister said that he was looking at the data processing service. Presumably he is looking at this with everything else. This has 130 competitors in private business. I very much hope that what the Minister says about these activities indicates that he approaches these things with an open mind.
On telecommunications the Minister was rather vaguer. However, he did not come down firmly in favour of some of the wilder things which were said before the election, although I noticed that Plessey's, who have a very big interest in the possibility of private enterprise in the telecommunications service, contributed unaccountably—or accountably—£10,000 each year to the Conservative Party and another £10,000 to British United Industrialists. If we are suspicious, this is because there are real fears about the Government's intention here.
The Government have come forward with a different political philosophy. I want to deal solely with the Government's handling of the Post Office services. The present rights under which the Post Office has been operating are enshrined in Statute. It would be totally wrong foe the Minister or the Government to try to side-track a Statute on the Statute Book by replacing the Chairman with someone more compliant with their political purposes. There are respectful precedents for drawing the attention of the House to the danger of side-tracking Statutes by administrative action, to which I can draw the attention of hon. Members who wish to study them.
My next point is the fear of the hiving-off of profitable parts. It is no good the right hon. Gentleman being innocent about it. After all, on Thursday we shall be discussing reducing the powers of the Coal Board. They are taking the profitable routes from the public Air Corporations. To say that these fears and doubts about the Post Office were simply cooked up, as one hon. Member did, in order to put down a Motion of censure is too naive for words. I would

say that no one who invests his money speculatively in buying profitable parts of the sector sold off by this Government at knockdown prices should be so unwise as to assume that they will be compensated on the basis of value that derives from public enterprise by a future Labour Government. We have to argue this out in the future.
The real reason why Lord Hall was dismissed, I believe, goes right back to the right hon. Gentleman announcing, on 23rd July, that the Post Office were asking for tariff increases. He will remember that he said:
I am, however, informed by the Post Office that it embarked on this printing with the full knowledge of the Government and that that information was deliberately suppressed before the election.
That was received with very wide shock and with applause from his side of the House. He later said, when I asked him about the stamps:
The Post Office is always printing stamps.
He said something else:
It is the presence of those phosphor bars which determines the intention of the Post Office. The printing was on the basis, as again the right hon. Gentleman knows perfectly well, of a tariff of this nature.
I have studied those words with some care and I have looked at something else. He said earlier, when announcing the proposals from the Post Office:
I am, however, assured that this does not preclude consideration of alternatives in the light of suggestions from the Users' Council and until its comments are available the Government remains uncommitted to the Post Office's proposals."—[OFFICIAL REPORT, 23rd July, 1970; Vol. 803, c. 761.]
That final quotation can mean only that the phosphor bar stamps had not been printed before the election. I do not believe they had. I have enough recollection of the time it takes from the ordering of stamps to the printing of stamps to know that these stamps of higher valuation, with the phosphor bars, could not have been printed. I wrote to the right hon. Gentleman about it and asked him on which date the stamps were printed. I have not a carbon copy; the letter was in my own hand. I wrote on 1st August, and he replied to me that the stamps had been ordered on 15th May and that that was as far as he could go. I wrote back and said, "Yes, I know they were ordered on 15th May, but when


were the stamps printed with the phosphor bars?" He replied to me that he was not sure that the question which I had put to him was meaningful, and that in any event it was a matter for Lord Hall. I wrote to Lord Hall, who wrote a totally loyal answer—showing more loyalty to the right hon. Gentleman than the right hon. Gentleman showed him—to confirm the date on which the stamps had been ordered and to decline to answer my question as to the date the stamps were printed.
I ask the right hon. Gentleman—he will not be able to answer now—to tell me the answer to this question: on what date were the 6d. and 7d. stamps printed with the phosphor bars signifying that they were for use with the second and first-class postal services? I believe that the right hon. Gentleman misled the House in July.

Mr. Chataway: As the right hon. Gentleman knows, Lord Hall confirmed to him—I have a copy of the letter—that the order was given to the printers to proceed with a programme of stamp printing on 15th May, 1970, the last possible date on which an order for a complicated programme could be given. The date on which the dies were cut and all the subsequent processes took place is totally irrelevant.

Mr. Benn: The right lion. Gentleman told the House in July that the stamps were printed during the election—

Mr. Chataway: rose—

Mr. Benn: No, I will not give way. The right hon. Gentleman—

Mr. Chataway: rose—

Mr. Faulds: Sit down.

Mr. Speaker: Order. Again I ask the hon. Member for Smethwick (Mr. Faulds) to contain himself.

Mr. Benn: The right hon. Gentleman knows very well—and I hope that he will make a statement to the House—that those higher-valued stamps with the phosphor bars were not printed during the election period. I believe that this explains a great deal of the right hon. Gentleman's hatred for Lord Hall and the decision that he made to dismiss him.
The right hon. Gentleman gave shabby treatment to the Chairman, and I believe that this Motion of censure is fully justified.

9.46 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): There is one matter in which I can join the right hon. Gentleman, and that is congratulating my hon. Friend the Member for Orpington (Mr. Stanbrook) on his extremely robust maiden speech. I would not have suggested that it was exactly non-controversial. But my hon. Friend was very fair. He said that it was not non-controversial but that it was impartial. He was critical of all parts of the House. One of his criticisms of all parts was that occasionally we make more noise than we should. As one who has not earned the reputation over the years of being always entirely quiet, I take my hon. Friend's strictures to heart.
Probably we are all painfully aware that this House provides many pitfalls for the unwary. One of those experienced by many Oppositions over the years is that censure Motions announced in the heat of the moment look very different when they come to be debated. As my right hon. Friend the Minister of Posts and Telecommunications said, this one is no exception.
On Wednesday, the Leader of the Opposition leapt to his feet declaring amid the cheers of his supporters that the Government were to be censured over the dismissal of Lord Hall as Chairman of the Post Office Corporation. In accordance with precedents, I naturally offered time for the debate at the earliest opportunity. I cannot pretend to the House that I felt any twinges of anxiety or reluctance as I did so.
I was not surprised to hear shortly afterwards one of those whispers which go round the House to the effect that the Opposition Motion was not to be a censure on my right hon. Friend the Minister of Posts and Telecommunications and would be somewhat broader than the dismissal of Lord Hall. "Ah," I thought to myself. "It will look different on Monday."
Then the Motion was tabled. It was much broader. In the columns of the Press, doubts began to arise. I read on


Friday that some wise Labour Members doubted the wisdom of the Shadow Cabinet in rushing into a censure Motion, and those doubts increased over the weekend—

Mr. Robert Mellish: The right hon. Gentleman should not believe all that he reads.

Mr. Whitelaw: I have been through it all before.
With his usual candour, our former colleague, Mr. Woodrow Wyatt, went further in his Daily Mirror article, as my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) said in his extremely able speech. In the Daily Mirror, Mr. Woodrow Wyatt said:
The remarkable thing about Lord Hall is not that he was sacked but that he was ever appointed.
"Ah ", I thought to myself. "I have heard it all before. It will look very different on Monday."
Today, we have had the speech of the hon. Member for Barons Court (Mr. Richard) moving the Motion with, as so often on these occasions, 50 or 60 Members on the benches behind him. I was rather sorry for the hon. Member for Barons Court, because he did his best but he was completely destroyed, as anyone who was in the House at that time will know, by my right hon. Friend the Minister of Posts and Telecommunications.
Then we had the right hon. Member for Bristol, South-East (Mr. Benn). He, of course, is a brilliant debater. He produces many graphic phrases. The less good his case, the faster he speaks and the more graphic phrases he produces. On this occasion, he talked about a most interesting speculation which he described as creative tension. I am not sufficiently educated and wise to know exactly what one means by "creative tension", but I am sure that it is something very wise.
The right hon. Gentleman went so far from the Motion as to discuss the possibility of broadcasting being given to the Leader of the House—I must say, a suggestion that I could have done without, but it seemed to have very little relevance to the Motion which is before the House.
I welcome the opportunity to reply to the debate—[HON. MEMBERS: "Hear,

hear."] If I may say so, I seem to have been enjoying it quite well so far—first, because it gives me the chance, and in this I want to be absolutely serious, to make it perfectly clear that I fully support my right hon. Friend in his decision and, secondly, to tell the simple truth and dispel some of the wild rumours fostered by right hon. and hon. Members opposite.
At this stage, I should like to make one thing perfectly clear. I acknowledge the perfectly fair point made by the hon. Member for Manchester, Openshaw (Mr. Charles R. Morris) and by the hon. Member for Newcastle-under-Lyme (Mr. Golding) that Lord Hall's dismissal has caused anxieties among Post Office workers. Of course, I accept that. I believe also, however, that they have been quite unnecessarily stirred up by many of the statements of the party opposite.

Mr. Molloy: rose—

Mr. Whitelaw: I am sorry, I cannot give way. I did not refer to the hon. Gentleman.

Mr. Charles R. Morris: Will the Leader of the House give evidence for the statement which he has just made?

Mr. Whitelaw: I consider that it is a reasonable statement based upon what I have read and seen in the Press over the weekend.
I want to be perfectly fair, however, and no one will accuse me of anything else. I recognise that Lord Hall certainly seems to have aroused the support of the workers in the Post Office. That is important. That was one of his qualities. There are, however, many other qualities required of the Chairman of the Post Office, and my right hon. Friend is entitled to take those into account.
If a responsible Minister is convinced that in the public interest he must make a change in personalities of this sort, surely his colleagues who are concerned in a decision of this sort must back him as long as they are convinced that his decision has not been lightly taken and that it has not been activated by personal malice of any sort or kind. I was left in no doubt whatever that my right hon. Friend, as one would expect of him, had considered the whole question very deeply and was utterly convinced of the need for a change in chairmanship.
I do not understand the subtle distinction which the right hon. Member for Wednesbury (Mr. Stonehouse), in a rather extraordinary speech, made between a co-ordinating chairman and a chief executive. What my right hon. Friend has said is that he believed that Lord Hall was not the right man to be Chairman of the Post Office. Nor at any time did any question of Lord Hall's political sympathies arise. Therefore I can assure the House with complete personal conviction that no question of political victimisation arose at all. Nor is there any truth at all in the speculative allegations of policy implications which seem to have excited hon. and right hon. Gentlemen opposite so much.
In any event, no doubt the present Board of the Post Office under its new Chairman—HON. MEMBERS: "Who?"]—will be perfectly well able to stand up for what it believes to be in the best interests of the Post Office. When hon. Gentlemen over there ask me who is that successor to be, I find this an absolutely extraordinary situation—that the Government and the Minister should go jobbing around to get a new chairman for a public corporation when they have still got the present chairman there and not telling him that they have decided he should go. This is something I simply cannot understand.
My right hon. Friend has made it perfectly clear that he had no policy disagreement with Lord Hall. I am certainly not going now to make a commitment on future Government policy. No one would expect me to do so. [HON. MEMBERS: "Oh"] Why should I? I simply say I am extremely surprised to hear that anyone would expect me to do so because I want to make it perfectly clear that the House must take my word, in addition to my right hon. Friend's, that

matters of policy are just not involved in this decision.

That is the full story, and I should have thought that, far from being censured, my right hon. Friend should be warmly commended for his courage in doing what he believes to be in the best interests of the Post Office and the public rather than taking the easy way out, and if in this task his judgment leads him to face difficult personal decisions he must do so.

Perhaps to their credit, whether or not one agrees with their views, the right hon. Lady the Member for Blackburn (Mrs. Castle) acted over Sir Stanley Raymond, and the right hon. Gentleman the Member for Bristol, South-East acted over Mr. Cuthbert Wrangham, Chairman of Short Brothers and Harland in a similar way to my right hon. Friend. Those decisions may have been to their credit when they took them, but they redound to their discredit tonight as they seek in Opposition to censure the kind of action which they themselves took when in Government. Fortunately the British public have a profound contempt for such Opposition manoeuvres, which have been so wisely denounced by the right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins), the Deputy Leader of the Opposition.

So now I simply ask the House to bury the Opposition in the hole which they have dug for themselves, by decisively rejecting this contemptible and silly little censure Motion.

Question put,
That this House censures Her Majesty's Government for their recent handling of Post Office affairs, and the implications of their action in dismissing Lord Hall, the Chairman of the Post Office Corporation:—

The House divided: Ayes 254, Noes 301.

Division No. 38.]
AYES
[9.59 p.m.


Abse, Leo
Bishop, E. S.
Carter, Ray (B'mingham, N'field)


Allaun, Frank (Salford, E.)
Blenkinsop, Arthur
Castle, Rt. Hn. Barbara


Allen, Scholefield
Boardman, H. (Leigh)
Clark, David (Colne Valley)


Archer, Peter (Rowley Regis)
Bottomley, Rt. Hn. Arthur
Cocks, Michael (Bristol, S.)


Armstrong, Ernest
Boyden, James (Bishop Auckland)
Cohen, Stanley


Ashley, Jack
Bradley, Tom
Coleman, Donald


Ashton, Joe
Broughton, Sir Alfred
Concannon, J. D.


Atkinson, Norman
Brown, Hugh D. (G'gow, Provan)
Conlan, Bernard


Bagier, Gordon A. T.
Brown, Bob (N'c'tle-upon-Tyne, W.)
Corbet, Mrs. Freda


Barnes, Michael
Brown, Ronald (Shoreditch &amp; F'bury)
Cox, Thomas (Wandsworth, C.)


Barnett, Joel
Buchan, Norman
Crawshaw, Richard


Beaney, Alan
Buchanan, Richard (G'gow, Sp'burn)
Cronin, John


Benn, Rt. Hn. Anthony Wedgwood
Butler, Mrs. Joyce (Wood Green)
Crosland, Rt. Hn. Anthony


Bennett, James (Glasgow, Bridgeton)
Campbell, I. (Dunbartonshire, W.)
Crossman, Rt. Hn. Richard


Bidwell, Sydney
Carmichael, Neil
Cunningham, George (Islington, S.W.)




Cunningham, Dr. John A. (Whitehaven)
Jeger, Mrs. Lena (H'b'n &amp; St.P'cras, S.)
Pavitt Laurence


Dalyell, Tam
Jenkins, Hugh (Putney)
Peart Rt. Hn. Fred


Darling, Rt. Hn. George
John, Brynmor
Pendry, Tom


Davidson, Arthur
Johnson, Carol (Lewisham, S.)
Pentland, Norman


Davies, Dcnzil (Llanelli)
Johnson, James (K'ston-on-Hull, W.)
Perry, Ernest G. (Battersea, S.)


Davies, G. Elfed (Rhondda, E.)
Johnson, Walter (Derby, S.)
Prentice, Rt. Hn. Reg.


Davies, Ifor (Gower)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Prescott, John


Davies, S. O. (Merthyr Tydvil)
Jones, Gwynoro (Carmarthen)
Price, J. T. (Westhoughton)


Davis, Clinton (Hackney, C.)
Jones, Barry (Flint, E.)
Price, William (Rugby)


Deakins, Eric
Jones, T. Alec (Rhondda, W.)
Rankin, John


de Freitas, Rt. Hn. Sir Geoffrey
Judd, Frank
Reed, David (Sedgefield)


Delargy, H. J.
Kaufman, Gerald
Rees, Merlyn (Leeds, S.)


Dell, Rt. Hn. Edmund
Kelley, Richard
Rhodes, Geoffrey


Dempsey, James
Kerr, Russell
Richard, Ivor


Doig, Peter
Kinnock, Neil
Roberts, Albert (Normanton)


Dormant), J. D.
Lambie, David
Roberts, Rt. Hn. Goronwy (Caernarvon)


Douglas, Dick
Lamond, James
Robertson, John (Paisley)


Douglas-Mann, Bruce
Latham, Arthur
Roderick, Caerwyn E.


Driberg, Tom
Lawson, George
Rogers, William (Stockton-on-Tees)


Duffy, A. E. P.
Leadbitter, Ted
Roper, John


Dunn, James A.
Lee, Rt. Hn. Frederick
Rose, Paul B.


Dunnett, Jack
Lestor, Miss Joan
Ross, Rt. Hn. William (Kilmarnock)


Eadle, Alex
Lever, Rt. Hn. Harold
Sheldon, Robert (Ashton-under-Lyne)


Edelman, Maurice
Lewis, Arthur (W. Ham, N.)
Shore, Rt. Hn. Peter (Stepney)


Edwards, Robert (Bilston)
Lewis, Ron (Carlisle)
Short, Rt. Hn. Edward (N'c'tle on Tyne)


Edwards, William (Merioneth)
Lipton, Marcus
Short, Mrs. Renée (W'hampton, N.E.)


Ellis, Tom
Lomas, Kenneth
Silkin, Rt. Hn. John (Deptford)


English, Michael
Lyon, Alexander W. (York)
Silkin, Hn. S. C. (Dulwich)


Evans, Fred
Lyons, Edward (Bradford, E.)
Sillars, James


Faulds, Andrew
McCann, John
Silverman, Julius


Fernyhough, E.
McCartney, Hugh
Skinner, Dennis


Fisher, Mrs. Doris (B'ham, L'wood)
MacColl, James
Small, William


Fitt, Gerard (Belfast, W.)
McElhone, Frank
Smith, John (Lanarkshire, N.)


Foley, Maurice
Mackie, John
Spearing, Nigel


Foot, Michael
Mackintosh, John P.
Spriggs, Leslie


Ford, Ben
Maclennan, Robert
Stallard, A. W.


Forrester, John
McMillan, Tom (Glasgow, C.)
Stewart, Rt. Hn. Michael (Fulham)


Fraser, John (Norwood)
McNamara, J. Kevin
Stoddart, David (Swindon)


Freeson, Reginald
MacPherson, Malcolm
Stonehouse, Rt. Hn. John


Galpern, Sir Myer
Mallalieu, E. L. (Brigg)
Strang, Gavin


Garrett, W. E.
Marquand, David
Strauss, Rt. Hn. G. R.


Gilbert, Dr. John
Marsh, Rt. Hn. Richard
Summerskill, Hn. Dr. Shirley


Ginsburg, David
Mason, Rt. Hn. Roy
Swain, Thomas


Gordon Walker, Rt. Hn. P. C.
Mayhew, Christopher
Thomas, Rt. Hn. George (Cardiff, W.)


Gourlay, Harry
Meacher, Michael
Thomas, Jeffrey (Abertillery)


Grant, George (Morpeth)
Mellish, Rt. Hn. Robert
Tinn, James


Grant, John D. (Islington, E.)
Mendelson, John
Tomney, Frank


Griffiths, Eddie (Brightside)
Mikardo, Ian
Torney, Tom


Gunter, Rt. Hn. R. J.
Millan, Bruce
Tuck, Raphael


Hamilton, James (Bothwell)
Miller, Dr. M. S.
Urwin, T. W.


Hamling, William
Milne, Edward (Blyth)
Varley, Eric G.


Hannan, William (G'gow, Maryhill)
Molloy, William
Wainwright, Edwin


Hardy, Peter
Morgan, Elystan (Cardiganshire)
Walden, Brian (B'm'ham, All Saints)


Harper, Joseph
Morris, Alfred (Wythenshawe)
Walker, Harold (Doncaster)


Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)
Wallace, George


Hart, Rt. Hn. Judith
Morris, Rt. Hn. John (Aberavon)
Watkins, David


Hattersley, Roy
Moyle, Roland
Weitzman, David


Healey, Rt. Hn. Denis
Mulley, Rt. Hn. Frederick
Wellbeloved, James


Heffer, Eric S.
Murray, Ronald King
Wells, William (Walsall, N.)


Horam, John
Ogden, Eric
White, James (Glasgow, Pollok)


Houghton, Rt. Hn. Douglas
O'Halloran, Michael
Whitlock, William


Howell, Denis (Small Heath)
O'Malley, Brian
Willey, Rt. Hn. Frederick


Huckfield, Leslie
Orbach, Maurice
Williams, Alan (Swansea, W.)


Hughes, Rt. Hn. Cledwyn (Anglesey)
Oswald, Thomas
Wilson, Alexander (Hamilton)


Hughes, Dr. Mark (Durham)
Owen, Dr. David (Plymouth, Sutton)
Wilson, Rt. Hn. Harold (Huyton)


Hughes, Robert (Aberdeen, N.)
Padley, Walter
Wilson, William (Coventry, S.)


Hughes, Roy (Newport)
Paget, R. T.
Woof, Robert


Hunter, Adam
Palmer, Arthur



Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Pannell, Rt. Hn. Charles
TELLERS FOR THE AYES:


Janner, Greville
Parker, John (Dagenham)
Mr. John Golding and


Jay, Rt. Hn. Douglas
Parry, Robert (L'pool Exchange)
Mr. Kenneth Marks.




NOES


Adley, Robert
Baker, W. H. K. (Banff)
Biggs-Davison, John


Alison, Michael (Barkston Ash)
Balniel, Lord
Blaker, Peter


Allason, James (Hemel Hempstead)
Barber, Rt. Hn. Anthony
Boardman, Tom (Leicester, S. W.)


Amery, Rt. Hn. Julian
Beamish, Col. Sir Tufton
Body, Richard


Archer, Jeffrey (Louth)
Bell, Ronald
Boscawen, Hn. R. T.


Astor, John
Bennett, Dr. Reginald (Gosport)
Bossom, Sir Clive


Atkins, Humphrey
Benyon, W. R.
Bowden, Andrew (Brighton, K'town)


Awdry, Daniel
Berry, Hn. Anthony
Boyd-Carpenter, Rt. Hn. John


Baker, Kenneth (St. Marylebone)
Biffen, John
Braine, Bernard







Bray, Ronald
Hannam, John (Exeter)
Morgan, Geraint (Denbigh)


Brewis, John
Harrison, Brian (Maldon)
Morgan-Giles, Rear-Adm.


Brinton, Sir Tatton
Harrison, Col. Sir Harwood (Eye)
Morrison, Charles (Devizes)


Brocklebank-Fowler, Christopher
Harvey, Sir Arthur Vere
Mudd, David


Bruce-Gardyne, J.
Haselhurst, Alan
Murton, Oscar


Bryan, Paul
Hastings, Stephen
Nabarro, Sir Gerald


Buchanan-Smith, Alick
Havers, Michael
Neave, Airey


Bullus, Sir Eric
Hawkins, Paul
Nicholls, Sir Harmar


Burden, F. A.
Hay, John
Noble, Rt. Hn. Michael


Butler, Adam (Bosworth)
Hayhoe, Barney
Nott, John


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Heath, Rt. Hn. Edward
Onslow, Cranley


Carlisle, Mark
Heseltine, Michael
Oppenheim, Mrs. Sally


Carr, Rt. Hn. Robert
Hicks, Robert
Orr, Capt. L. P. S.


Channon, Paul
Higgins, Terence L.
Osborn, John


Chapman, Sydney
Hiley, Joseph
Owen, Idris (Stockport, N.)


Chataway, Rt. Hn. Christopher
Hill, J. E. B. (Norfolk, S.)
Page, Graham (Crosby)


Chichester-Clark, R.
Hill, James (Southampton, Test)
Paisley, Rev. Ian


Churchill, W. S.
Holland, Philip
Parker, John (Dagenham)


Clark, William (East Surrey)
Holt, Miss Mary
Peel, John


Clarke, Kenneth (Rushcliffe)
Hordern, Peter
Percival, Ian


Clegg, Walter
Hornby, Richard
Peyton, Rt. Hn. John


Cockeram, Eric
Hornsby-Smith, Rt. Hn. Dame P.
Pike, Miss Mervyn


Cooke, Robert
Howe, Sir Geoffrey (Reigate)
Pink, R. Bonner


Coombs, Derek
Howell, David (Guildford)
Pounder, Rafton


Cooper, A. E.
Howell, Ralph (Norfolk, N.)
Powell, Rt. Hn. J. Enoch


Cordle, John
Hunt, John
Price, David (Eastleigh)


Corfield, Rt. Hn. Frederick
Hutchison, Michael Clark
Prior, Rt. Hn. J. M. L.


Cormack, Patrick
Iremonger, T. L.
Proudfoot, Wilfred


Costain, A. P.
Irvine, Bryant Godman (Rye)
Pym, Rt. Hn. Francis


Critchley, Julian
James, David
Quennell, Miss J. M.


Crouch, David
Jenkin, Patrick (Woodford)
Ramsden, Rt. Hn. James


Crowder, F. P.
Jennings, J. C. (Burton)
Rawlinson, Rt. Hn. Sir Peter


Curran, Charles
Jessel, Toby
Redmond, Robert


Dalkeith, Earl of
Johnston, Russell (Inverness)
Reed, Laurance (Bolton, E.)


Dance, James
Jones, Arthur (Northants, S.)
Rees, Peter (Dover)


Davies, Rt. Hn. John (Knutsford)
Jopling, Michael
Rees-Davies, W. R.


d'Avigdor-Goldsmid, Sir Henry
Joseph, Rt. Hn. Sir Keith
Renton, Rt. Hn. Sir David


d'Avigdor-Goldsmid, Maj.-Gen. Jack
Kaberry, Sir Donald
Rhys Williams, Sir Brandon


Dean, Paul
Kellett, Mrs. Elaine
Ridley, Hn. Nicholas


Deedes, Rt. Hn. W. F.
Kerby, Capt. Henry
Roberts, Michael (Cardiff, N.)


Digby, Simon Wingfield
Kilfedder, James A.
Roberts, Wyn (Conway)


Dixon, Piers
Kimball, Marcus
Rodgers, Sir John (Sevenoaks)


Dodds-Parker, Douglas
King, Evelyn (Dorset, S.)
Rossi, Hugh (Hornsey)


Douglas-Home, Rt. Hn. Sir Alec
King, Tom (Bridgwater)
Rost, Peter (Derbyshire, S.E.)


du Cann, Rt. Hn. Edward
Kinsey, Joseph
Royle, Anthony


Dykes, Hugh
Kitson, Timothy
Russell, Sir Ronald


Eden, Sir John
Knight, Mrs. Jill
Sandys, Rt. Hn. D.


Edwards, Nicholas (Pembroke)
Knox, David
Scott, Nicholas


Elliot, Capt. Walter (Carshalton)
Lambton, Antony
Scott-Hopkins, James


Elliott, R.W. (N'c'tle-upon-Tyne, N.)
Lane, David
Sharples, Richard


Emery, Peter
Langford-Holt, Sir John
Shaw, Michael (Sc'b'gh &amp; Whitby)


Fell, Anthony
Legge-Bourke, Sir Harry
Shelton, William J. (Clapham)


Fenner, Mrs. Peggy
Le Marchant, Spencer
Simeons, Charles


Fidler, Michael
Lewis, Kenneth (Rutland)
Sinclair, Sir George


Finsberg, Geoffrey
Lloyd, Rt. Hn. Geoffrey (Sut'n C'field)
Skeet, T. H. H.


Fisher, Nigel (Surbiton)
Lloyd, Ian (P'tsm'th, Langstone)
Smith, Dudley (W'wick &amp; L'mington)


Fletcher-Cooke, Charles
Loveridge, John
Soref, Harold


Fookes, Miss Janet
MacArthur, Ian
Speed, Keith


Fortescue, Tim
McCrindle, R. A.
Spence, John


Foster, Sir John
Maclean, Sir Fitzroy
Sproat, Iain


Fowler, P. N.
Macmillan, Maurice (Farnham)
Stainton, Keith


Fox, J. Marcus
McNair-Wilson, Michael (W'stow, E.)
Stanbrook, Ivor


Fraser, Rt. Hn. Hugh (S'fford &amp; Stone)
McNair-Wilson, Patrick (New Forest)
Stewart-Smith, D. G.


Fry, Peter
Maddan, Martin
Stodart, Anthony (Edinburgh, W.)


Galbraith, Hn. T. G.
Madel, David
Stoddart-Scott, Col. Sir M.


Gardner, Edward
Maginnis, John E.
Stokes, John


Gibson-Watt, David
Marples, Rt. Hn. Ernest
Stuttaford, Dr. Tom



Marten, Neil
Sutcliffe, John


Gilmour, Sir John (Fife, E.)
Mather, Carol
Tapsell, Peter


Glyn, Dr. Alan
Maude, Angus
Taylor, Edward M. (G'gow, Cathcart)


Godber, Rt. Hn. J. B.
Mawby, Ray
Taylor, Frank (Moss Side)


Goodhart, Philip
Maxwell-Hyslop, R. J.
Taylor, Robert (Croydon, N.W.)


Goodhew, Victor
Meyer, Sir Anthony
Tebbit, Norman


Gorst, John
Mills, Peter (Torrington)
Temple, John M.


Gower, Raymond
Mills, Stratton (Belfast, N.)
Thomas, John Stradling (Monmouth)


Gray, Hamish
Miscampbell, Norman
Thomas, Rt. Hn. Peter (Hendon, S.)


Green, Alan
Mitchell, David (Basingstoke)
Thompson, Sir Richard (Croydon, S.)


Grieve, Percy
Mitchell, Lt-Col. Colin (Aberd'sh'e, W).
Tilney, John


Griffiths, Eldon (Bury St. Edmunds)
Moate, Roger
Trafford, Dr. Anthony


Grimond, Rt. Hn. J.
Molyneaux, James
Trew, Peter


Gummer, Selwyn
Money, Ernie
Tugendhat, Christopher


Gurden, Harold
Monks, Mrs. Connle
Turton, Rt. Hn. R. H.


Hall, Miss Joan (Keighley)
Monro, Hector
van Straubenzee, W. R.


Hall, John (Wycombe)
Montgomery, Fergus
Vaughan, Dr. Gerard


Hall-Davis, A. G. F.

Vickers, Dame Joan







Waddington, David
Wells, John (Maidstone)
Woodnutt, Mark


Walder, David (Clitheroe)
White, Roger (Gravesend)
Worsley, Marcus


Walker, Rt. Hn. Peter (Worcester)
Whitelaw, Rt. Hn. William
Wylie, Rt. Hn. N. R.


Walker-Smith, Rt. Hn. Sir Derek
Wiggin, Jerry
Younger, Hn. George


Wall, Patrick
Wilkinson, John



Walters, Dennis
Wolrige-Cordon, Patrick
TELLERS FOR THE NOES:


Ward, Dame Irene
Wood, Rt. Hn. Richard
Mr. Jasper More and


Warren, K.
Woodhouse, Hn. Christopher
Mr. Reginald Eyre.


Weatherill, Bernard

LOCAL AUTHORITIES, SCOTLAND (BORROWING RATES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]

10.11 p.m.

Mr. Adam Hunter: I wish to raise the subject of high rates of interest granted by the Public Works Loan Board to local authorities in Scotland. I had hoped that this debate would have taken place in the context of a Scottish debate, but unfortunately I see that the hon. Gentleman the Minister of State at the Treasury will reply. His presence in this debate is a little forbidding—or should it be foreboding? However, I have no intention, nor am I capable of doing so, of going into the realms of high finance, nor into the intricacies of international money markets. I shall simply deal with a question which has a relationship to my constituency.
For a very long time many local authorities in Scotland, particularly the smaller ones, have been concerned about the high rates of interest from the Public Works Loan Board for development purposes, and this is my reason for raising this matter tonight. It is true that there has been a great lessening of the effects of high interest rates in the matter of housing construction, but other capital projects have been hard hit by the prevailing rates. There are certain projects in house-building which are excluded, namely, those relating to sewers and general open spaces, and which also come in for the high increased borrowing rates. Because of the absence of low rates, many local authorities are inhibited in bringing forward capital projects, projects which could mean very much better local amenities in their areas.
The question of high rates of interest from all sources has been a continuing grievance in my constituency. Many councillors do not understand why interest rates should be so high. They appreciate the benefits they receive in regard to housing, but they cannot understand why the rates in relation to development projects are so high. The Government should take appropriate action to dispel the objections of many

councillors and dispense with the need to raise rents to meet the deficits on many housing accounts in Scotland.
This is not a political exercise, because I raised this matter when the Labour Government were in power. I made representations to the Minister of State on high interest rates and the consequential incidence of progressively increased local authority rates because of the high rates being paid for the various projects and other types of expenditure incurred by local authorities.
Two small burghs in my constituency have been hard hit by pit closures. The result has been a decrease in population. There is a philosophy going round in some quarters, though not openly canvassed, that the old towns where the traditional industry has gone should not get the same attention as the new towns in other areas regarding the provision of services and local amenities. I do not hold that this should be so. I still feel that many of the old mining towns and villages remain lively, close-knit communities and will be for many years to come if they are provided with local amenities.
There has been a great deal of expenditure on housing, schools and other infrastructure in those areas. It would be folly to lose this by not encouraging local authorities to make provision for community centres, swimming pools, modern administrative offices and public halls to allow the communities to carry on public activities.
The small burgh of Inverkeithing in my constituency has an extremely modern administrative and public centre, called a civic centre. This was built a few years ago and was opened by the hon. Member for Glasgow, Hillhead (Mr. Galbraith), then the Under-Secretary of State for Scotland. It is a wonderful, modern building with administrative offices for all departments to carry out their local authority work. It also has a large and a small hall for community activities. I should like every small town, or large town for that matter, and village in Scotland to have such an attractive centre.
Some relief must be granted by lower interest rates on a wider aspect of local authority expenditure, particularly on projects such as I have mentioned which are not covered by the housing subsidy.
I should like to give one or two examples. I refer particularly to my constituency interest—Cowdenbeath. This small burgh has problems finding money for development projects for local amenities. I feel that not only Cowdenbeath but many other local authorities in Scotland, large and small, have this problem. Cowdenbeath Town Council would like to build a community centre for young and old alike for recreational needs. The estimated cost for such a project is about £150,000. The annual loan charges over 30 years would be £14,860 on the present rate of the Public Works Loan Board, which I understand is 9·29 per cent. If this loan charge were reduced by 1 per cent. it would mean a saving of £1,284 for Cowdenbeath Town Council. This would mean 1d. in the £ off the annual rate burden.
Another example is that the same council is going through with the modernisation of older type houses, and the improvement also extends to the installation of central heating. It will get grants for improving the houses but will not get them for installing central heating. The cost of installation is £200 per house, and this means that the loan charge rate of 9·29 per cent. will be very high, indeed. But if the rate were cut by 1 per cent., it would mean a saving for the tenant of 7d. per week, or 28s. per year on a 48-week year. That may seem small but in the present climate of swiftly rising prices every little helps with the financial budget.
If work of the kind I have mentioned were treated in the same way as housing construction, it would mean simply that the percentage of loan charges between 4 and 9¼ per cent. would be met by the Government. This would mean a great saving in the installation of central heating in these old houses, rather than having the tenant meet the cost of £200 per house by way of increased rents.
I turn now to an aspect which may be contested by the Minister, It concerns housing construction. Under the Housing (Financial Provisions) (Scotland) Act, 1968, local authorities receive as subsidy excess borrowing costs over 4 per cent. The experience of Cowdenbeath has been that rates for subsidy purposes are fixed on the preceding financial year's rate, and the tendency has been for the rate

so fixed to be below the current interest rates. The effect has been that local authorities are not receiving the full subsidy of interest rates over 4 per cent. This is a serious financial burden on the smaller authorities. At the same time, it is felt that the indicative cost factors, on which housing costs and, eventually, subsidies are based, are not keeping pace with the increased costs of housing construction. Unless there is a constant review of indicative cost factors, again local authorities are the losers in that the Government are comparing tenders submitted by local authorities in standard figures which are out of date.
Cowdenbeath County Council has been concerned for some time about the higher rate for borrowing for development purposes. It has many developments in mind, as have many neighbouring small burghs. I understand that Lochgelly, only a few miles away, also has the intention of building a large community centre with a concert hall. If there is no further aid from the Government, this project will be very costly for the ratepayers. Some more aid should be given by the Government to make these small towns, which are ex-mining towns, much better places to live in.
Cowdenbeath Town Council protested to the Scottish Development Department on 19th August and asked for a deputation to be received to discuss high interest rates and their effects. The Department refused the request because it felt that this was a matter for the Treasury. This is my experience tonight because, instead of a reply from the Under-Secretary of State for Scotland who is responsible for local government, we are to have a reply from the Minister of State, Treasury.
However, the Department, in its reply to Cowdenbeath, acknowledged that the present high level of interest rates made it very difficult for local authorities and also for the Government and private individuals. It also stated that the rates being charged were necessary in terms of the Government's own lending through the Public Works Loan Board. It was explained how the principle of the Public Works Loan Board lending had evolved, and how it had received statutory backing under the National Loans Act, 1968. It was claimed that the Government had gone some way towards protecting local


authorities from the full impact of high borrowing costs, and also said that the Public Works Loan Board quota arrangements and the operation of rate support grants were used to keep down interest rates.
It further maintained that under the quota arrangements the board is able to meet a substantial proportion of local authority borrowing needs at rates which, although high, are normally below those at which local authorities are able to borrow on the open market. The purpose behind the debate is to submit to the Minister that local authorities require a greater proportion of their borrowing needs at lower interest rates to provide the services that I have mentioned.
Much of what is contained in the Scottish Development Department's reply is correct, but it is not enough to say that the rate support grant calculations take full account of increases in Public Works Loan Board interest rates or loans from any other source. More specific Government aid is required. The Minister should note that the small burgh council in question has followed a wise policy in its borrowing needs. If he studies the position he will see that it compares favourably with many other local authorities. Like the officials and members of this council, I feel that more assistance should be forthcoming from the Government.

10.27 p.m.

Mr. Dick Douglas: I am indebted to my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter) for raising this topic this evening. He indicated that the small changes in the rate of interest issued through the Public Works Loan Board are detrimental to the financing of the infrastructure in Scotland. He has, naturally, spoken from a constituency level, but if we consider the picture as it concerns the whole of Scotland we see that since this Government came into office the Public Works Loan Board rates have risen by ⅛ per cent., but taking it over all, the total of local authority capital expenditure, excluding house building, the cost is still over £100,000. I welcome the Minister's contradicting or substantiating that figure.
We must consider that against the fact that the Government made certain promises in the General Election, and the

Minister responsible for regional development in Scotland is on the Front Bench. The Government made certain promises to the effect that one of the key factors in their policy to attract industry did not necessarily involve giving grants to industry, but involved building up the infrastructure. They are at present taking credit for an infrastructure which the Labour Government built up. We want to see the Government taking their own direct policy of aiding local authorities and other Scottish agencies in building up the social fabric of the community, which is essential if we are to achieve what industry in Scotland increasingly requires.
We know that the Government's policy may be excused on the basis that they are only continuing the policy that the Labour Government embarked upon. Nevertheless, if they are going to develop an attraction policy for industry they have a responsibility to make clear that differential policies will be related in terms of interest payments to local authorities. We want some news about this. Local authorities in England have received a circular indicating that they will have more freedom in the granting of capital development. Scottish local authorities have not had that. We await a comprehensive statement on local authority finance from the Secretary of State for Scotland, and because the Treasury holds the purse strings we are entitled to a clear statement that Scottish local authorities will receive differential treatment.

10.30 p.m.

Mr. Ian MacArthur: I am sure that the House is obliged to the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) for raising this matter, which is so important to local authorities and others in Scotland, so impartially and helpfully.
The hon. Member said that he had made similar representations to the Minister of State in the previous Administration. I was glad to hear that, but I am sorry that he did not tell us whether he had received any encouragement. The Minister of State was a senior Minister in an Administration which put up interest charges on local authorities to the highest point ever reached in modern times. We are now suffering from the imposition of these rates which have forced up rents, rates and costs on


every aspect of local authority work. It ill becomes hon. Gentlemen opposite to parade their consciences in this way when they trooped into the Lobby time after time and year after year supporting the Labour Government in their incompetence in courses of action which forced up costs in Scotland.
The hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas) might remember that just before the 1966 General Election his right hon. Friend promised the country that there would be more new jobs in Scotland by 1970. Now, in 1970, there are about 45,000 fewer jobs, thanks to the mismanagement of a Labour Government. The great cry in Scotland should be one of relief at having again a Conservative Government who recognise the true problems of Scotland and who have at last introduced a system of regional development and incentive which will be effective and will bring more jobs to Scotland in future, just as our policies did in the past.

10.32 p.m.

The Minister of State, Treasury (Mr. Terence Higgins): Many matters of political controversy have been raised today, but it is one of the greatest privileges of the House that hon. Members can raise on the Adjournment matters of particular interest to their constituencies. It is right and proper that the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) should have taken this opportunity, at the end of a fairly hectic parliamentary day, to raise these points. It is also forunate that we should have had two further speeches which broadened the debate to cover the question of regional development generally, rather than just housing.
In considering the rate of interest, inevitably, one becomes involved in the entire range of Government economic policies, and it is difficult to avoid straying into those fields.
Local authorities borrow their capital finance for house building from a variety of sources. Since 1963, they have, of course, been entitled to draw from the Public Works Loan Board in each financial year a quota of their longer-term borrowing needs. For 1970–71, the quota for Scotland is 50 per cent. of the

likely capital requirements of the authorities. There are, of course, two rates of interest—a lower one applicable to borrowing under the quota and a slightly higher rate for borrowing in excess of the quota. The individual local authorities in the hon. Member's constituency are not all in the same situation in this respect. At all events, there are these two differential rates of interest. The current rates in November, this month, differ quite a bit between one period and another, depending how long the loan is for.
Local authorities can also borrow in other forms by short, medium or long term loans in the open market, by local authority bonds, or by issues of stock and negotiable bonds, with interest determined by market forces. But the interest rates payable by local authorities on their borrowing reflect the market, including international influences. For house building, on which the hon. Member concentrated, the present system of Government subsidy takes account of the rate of interest payable. The amount of subsidy is related to the cost of building a house and to the rate of interest on borrowing that cost.
The subsidy is an annual contribution calculated as the difference between the loan charges on the approved cost of a house at a rate of interest which is representative of borrowing by authorities in the year before the houses are completed and the loan charges which would have been incurred at a fixed borrowing rate of 4 per cent. Hon. Members opposite mentioned that some of these costs are escalating, but this is not something which can be laid at the door of the present Government. We have inherited a highly inflationary situation as a result of the economic policies of the previous Government, and this inevitably means that this situation is reflected in the position to which the hon. Member has himself referred.
A representative rate for subsidy purposes is calculated each year. The current representative rate—that is, the rate used for the calculation of subsidy on houses completed in the year ending 31st March, 1971—is 9·29 per cent., so that the annual subsidy is the equivalent of the annual loan charges on the approved cost of a house at 5·29 per cent. This calculation gives an annual subsidy of


£49 4s. for every £1,000 of approved cost, or £196 16s. for a house with an approved cost of £4,000. That, broadly speaking, is the present situation.
The present subsidy system has the effect of limiting the interest rate on local authority borrowing for house building to 4 per cent. on the subsidy payable on completion of houses. That is the normal basis which has prevailed, but the present situation is very much as it was created by the previous Government.
The hon. Member for East Stirlingshire (Mr. Douglas)—

Mr. William Ross: But what will be the position?

Mr. Higgins: The right hon. Gentleman must wait and see. It depends on the effect of our overall economic policies, and we are determined to cure the present inflationary situation. We made it quite clear in our election manifesto that we would do so. If we get that right, as I know we shall, it will do a great deal to offset many of the problems mentioned more specifically a moment or two ago by the hon. Member for Dunfermline Burghs.
In reply to the hon. Member for East Stirlingshire, I should like to stress that this Government are doing a great deal for the more broadly based development in Scotland, because almost the whole of Scotland has development area status. This means that we have a great many projects which are now to be encouraged as a result of the measures mentioned by my right hon. Friend the Chancellor of the Exchequer in his statement soon after the House returned from the Summer Recess. We have made it quite clear that we intend that these measures shall be made effective.
We shall, for example, provide loans on the more general industrial development side more flexibly. The rate of building grant for industrial development will be increased from the present 25 per cent. and 35 per cent. to 35 per

cent., and 45 per cent. I do not have time to do so tonight, but if we look at debates that we have had on this subject, taken in conjunction with the measures mentioned by my hon. Friend the Under-Secretary of State for Development in an Adjournment debate on 7th July with respect to the Highlands and Island Board, we see that we now have positive proposals in the investment field which will enable us to encourage investment in Scotland.
I stress as strongly as I can that our approach is that we shall have a definite and effective regional development policy and that the measures that my right hon. Friend the Chancellor of the Exchequer has proposed will, we believe, be efficient in carrying this out and in providing more employment in Scotland.
I take the point of the hon. Member for Dunfermline Burghs that it is very important to have effective regional policies both in areas where there are traditional industries and in those which are developing other more recent technological developments. The whole of our policy in this respect is directed to this end, and it is vitally important for the position in Scotland.
One final point I should make in this connection is that the Government are pursuing a general policy of rates of interest which cover in particular the use of monetary policy, and I suggest that the special deposits for which the Chancellor called in his speech a short time ago have a differential effect for Scotland. before the Scottish banks, as on previous occasions, have only one half of 1 per cent. in percentage terms—

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at nineteen minutes to Eleven o'clock.